Curt grows beautiful orchids. His total fixed cost is $22 a day, and his average variable cost is $2 a plant. ew people know about Curt's Orchids and he is maximizing his profit by selling 11 orchids a day for $4 a plant. Curt thinks that if he spends $10 a day on advertising, he can increase his market and sell 29 orchids a day for $4 a p Curt advertises will his average total cost increase or decrease at the quantity produced? Curt advertises and as a result he sells 29 orchids a day for $4 a plant, his

Curt grows beautiful orchids. His total fixed cost is $22 a day, and his average variable cost is $2 a plant. ew people know about Curt's Orchids and he is maximizing his profit by selling 11 orchids a day for $4 a plant. Curt thinks that if he spends $10 a day on advertising, he can increase his market and sell 29 orchids a day for $4 a p Curt advertises will his average total cost increase or decrease at the quantity produced? Curt advertises and as a result he sells 29 orchids a day for $4 a plant, his

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain the profit-maximizing output leveland profitof a monopolistic firm by drawing a graph. What are the advantages of internal economies of scale? Explain them briefly. What is the meaning of ‘acceptable loss’for a perfectly competitive firm ? Draw a graph and explain. How can we increase the Total Revenue of productsby using elasticity? Explain them briefly.
The graph depicts a monopolistically competitive firm. Assuming the firm's ATC is ATC', the firm's current economic profit (per day) is_____, and its long-run economic profit is _____. Price and cost $40 30 23 20 10 0 $3,000; $0 $1,500; $0 $1,500; $2,500 $4,000; $3,000 MR 150 200 MC ATC ATC AR=D Quantity (per day)
DE Quantity MC MR ATC Demand The graph above represents a firm in a monopolistically competitive market. Which of the following is true? The firm's profit-maximizing quantity is E. The firm is making a profit of (A - B) x D. The firm is making zero economic profits. The firm is making a loss of (A - B) x D.
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x Question Completion Status The following graph shows the costs and revenues of a typical firm operating in a certain market condition. What type of market this firm is operating under? Is it a perfect competition, or monopoly, or monopolistic competition market? How can you tell? Explain. MC ATC D AVC Save A
Bob competes in a monopolistically competitive market. Suppose some new firms enter the market, causing his perceived demand curve to shift. The following tables show Original Demand Curve his demand curves, before and after the change, and his cost information. Price Quantity TC Assume that Bob can only choose from the quantities of output given in the table. By how much will his profit change after these new firms enter the market? $33 $20,000 $32 1,000 $30,000 $31 2,000 $45,000 $30 3,000 $70,000 $29 4,000 $100,000 New Demand Curve Price Quantity TC $30 $20,000 $29 1,000 $30,000 $28 2,000 $45,000 $27 3,000 $70,000 $26 4,000 $100,000 O his profits will not change O decrease by $9,000 O increase by $11,000 O decrease by $11,000
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Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases average total cost does not change at the quantity produced O B. O C. average total cost increases at the quantity produced O D. average total cost decreases at the quantity produced
Consider the diagram below depicting the revenue and cost conditions faced by a monopolistically competitive firm, and then answer the following questions. $40 $35 $30 MC ATC $25 $20 $17.50 $15 $10 $4.40 $5 3.25 MR Demand 1 2 3 4 5 6 7 8 9 10 Quantity Instructions: Round your answers to 2 decimal places. a. What is total revenue for this firm? b. What is total cost for this firm? c. What is this firm's economic profit? d. This firm is most likely in (Click to select) V equilibrium because Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. ? MR = MC. ? the firm is experiencing economic profits. 2 the firm is experiencing normal profits. ? P> MC. ? demand exceeds marginal revenue. ? P= ATC. Price and costs
Please DRAW & write neatly (no cursive) showing all work. You are studying a restaurant, that sells only pasta, and operates in a monopolistically competitive environment. This restaurant sells pasta made from its own brand of pasta called Gino's Pasta. This restaurant faces its own individual demand curve given by: QD = 120 − 30pNow suppose that in this example, the restaurant has the total costs defined by: TC = 40 + 2Q Draw a figure that includes:a. The Demand Curveb. The MR Curvec. The MC Curved. The ATC Curve.
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