(Figure: Profit Margin 3) Jorge's company data is presented in the following graph. Jorge would earn a profit:Price or cost$12$11$10$9$8$7$6$5$4$3$2$1$0$-1$-2$-3$-4$-5$-6MarginalcostO only at an output of nine.at all output levels.at any output between 8 and 18.O at any output between 3 and 14.AveragecostVariablecost perunitDemand1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21Quantity

Profit refers to the sum of money that the producer or seller of a good earns over and above the…

(Figure: Profit Margin 3) Jorge's company data is presented in the following graph. Jorge would earn a profit: Price or cost $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 $-1 $-2 $-3 $-4 $-5 $-6 O only at an output of nine. O at all output levels. Marginal cost at any output between 8 and 18. at any output between 3 and 14. Average cost 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Quantity Variable cost per unit Demand

(Figure: Profit Margin 3) Jorge's company data is presented in the following graph. Jorge would earn a profit: Price or cost $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 $-1 $-2 $-3 $-4 $-5 $-6 O only at an output of nine. O at all output levels. Marginal cost at any output between 8 and 18. at any output between 3 and 14. Average cost 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Quantity Variable cost per unit Demand

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A5.
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Product Price = Quantity Sold = Explicit Costs Implicit Costs = = $30 5 units $42 $18 Referring to the above table, it can be concluded that: O Economic Costs are $24. O Economic Profit is $210. O Economic Loss is $30. O Economic Profit is $90.
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$150 $145 $140 MC $135 $130 $125 $120 $115 ATC $110 $105 $100 $95 $90 $85 $80 AVC $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 0 1 2 3 5 6 Quantity Produced 7 8 9 10 11 The graph above shows the cost functions for a perfectly competitive profit maximizing firm. If the market price of the product is $70 per unit, the firm will produce units, will cover make an economic profit of dollars. dollars of its fixed cost, and will
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Last year Bill Bailey quit his $20,000 per year job and invested $200,000 to open the Bargain Bonanzas. This year he sold for $600,000 merchandise he bought for $400,000. He paid his sales clerks $50,000. Bill could have earned 10 percent interest on other investments. This year, Bill’s: accounting and economic profit were both $150,000 economic loss was $70,000 economic profit was $110,000 economic profit was $220,000 less than his accounting profit
37
5. The following table presents the cost and revenue data for a firm: COSTS REVENUES Quantity Total Marginal Quantity Total Marginal Produced Cost Cost Demanded Price Revenue Revenue $25 $28 $32 $60 $54 1 1 $48 $42 $36 $30 $24 $18 $12 $37 $43 $50 3 3 4 4 5 5 $58 $67 $77 7 7 8 8 Complete the table above. What is the profit-maximizing output for this firm? a) 3 units b) 4 units c) 5 units d) 6 units