d. What is the firm's total variable cost at this level of output? e. What is the firm's fixed cost at this level of output? f. What is the firm's profit if it produces this level of output? g. What is the firm's profit if it shuts down? h. In the long run, should this firm continue to operate or shut down? 48 46 $2 10 18 864208 16 14 12 26 24 ww 2086420 MC ATC D² = MR AVC AFC

d. What is the firm's total variable cost at this level of output? e. What is the firm's fixed cost at this level of output? f. What is the firm's profit if it produces this level of output? g. What is the firm's profit if it shuts down? h. In the long run, should this firm continue to operate or shut down? 48 46 $2 10 18 864208 16 14 12 26 24 ww 2086420 MC ATC D² = MR AVC AFC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The table below shows cost and revenue information for Choco Lovers, a purely competitive firm producing different quantities of chocolate gift boxes. Fill in the blanks in the table. Instructions: Enter your answers rounded to two decimal places. Choco Lovers Cost and Revenue Quantity TC ATC MC of Gift Boxes ($) ($) ($) 60.00 12.00 2.00 10 67.50 6.75 15 5.17 2.00 20 92.50 3.00 25 117.50 4.70 5.00 30 152.50 5.08 7.00 Assume the profit-maximizing price is $3 per gift box, and then answer the following questions: a. Profit-maximizing quantity = gift boxes b. Total revenue = $ c. Profit = $ d. Profit per unit = $ per gift box
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17 $20 $18 MC АТС I of $16 P = MR $14 $12 $10 $8 AVC $6 $2 $0 200 400 600 800 1,000 1,200 Output (Q) The diagram above shows a Perfectly Competitive firm in the short-run. This firm will maximize its profit by choosing the Output (Q) level: Select one: а. 1,000 b. 800 С. 400 d. 600
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Complete the table and answer the following questions. The price for this perfectly competitive firm is $150. QTY FC VC TC AFC AVC ATC MC MR 0 500 1 650 2 700 3 760 4 840 5 950 6 1090 7 1270 8 1500 9 1790 10 2150 What price will this firm charge for its product? Should this firm produce? If so, how many units should it produce? If not, should it shut down? What is the economic profit or economic loss?
What is the long-run equilibrium quantity?
1.4) Suppose market price is RM60. How much will the firm produce in the short run? How much are total profits?
Complete the table below and graph the AR, MR, MC, and AC Q Price TR AR MR TC MC Profit 0 30 70 5 27 135 10 24 197 15 21 252 20 18 300 25 15 345 30 12 383 35 9 428 40 6 478 45 3 533 50 0 593 Provide a brief explanation of the firm's behavior to set production at 20 units at the price of P18 per unit.
Refer to the table. If seven barrels of oil are produced, this firm is making: a profit because MR > MC. a loss because TR < TC. a profit because P >AC. a loss because MC > AC.
Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine…
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