If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent,your rate of economic profit isminus 2 percent.2 percent.9 percent.16 percent.

The economic profit is the difference between revenue and total cost. Here total cost includes…

Answered: If most firms in an industry are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume a firm's marginal costs are increasing at its current level of output. If a firm's marginal revenue is less than the marginal cost of producing the last unit of output chosen by the firm, then: Profits can be increased if the firm decreases output. The firm is certainly earning an economic profit but not as much as it could be. Profits can be increased if the firm increases output. The firm's economic profit is necessarily less than zero.
30.What is true of a firm's production if it operates in a perfectly competitive market in long-run equilibrium? Marginal revenue = demand = marginal cost > average total cost Marginal revenue = marginal cost = average fixed cost Average total cost = price = average variable cost Marginal cost < Marginal revenue Price = marginal cost = average total cost
Desmond works as an accountant making $80,000 per year. He is considering leaving his job to open an artisanal cheese shop. He estimates that he will need to spend $20,000 per year on space, $10,000 per year on supplies and $40,000 per year on staff. The shop will earn will earn $120,000 per year in revenue. Assuming his estimates are accurate, what will Desmond's accounting profit be? Assuming his estimates are accurate, what will Desmond's economic profit be? Please enter your solution without commas, dollar signs, or cents.
Looking at the Table, Profit, Cost and Revenue Functions, Quant is the quantity of output, C(Q) is the Total Cost of production for corresponding quantities of output, R(Q) is the corresponding Total Revenue at each level of output Q, if all output is sold and PRF(Q) is the Total Profit for each corresponding output level. PRF(Q) is calculated as R(Q)-C(Q). Using this information, does the company make its highest profit where R(Q) is highest? a. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 15 Ob. Yes, because there is no way that cost can exceed revenue when revenue is maximized. Cc. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 10 or 12 or in between. Od. Yes, because the…
New entry increases your |e| from 2 to 5. If you previously maximized profits at a price of $16, your new profit maximizing is $10 $16 $8 $6.40 **please show your math**
Draw a model of a representative individual firm in the market for wheat, i.e. an Australian wheat farmer who is a price-taker in the global market for wheat, in long-run equilibrium. Comment on the assumed market structure. Show and explain the amount of wheat the farmer will produce to the market, and explain revenue, costs and profits. (please explain in a paragraph length for like)
10. Read this excerpt from the October 18, 2022, Wall Street Journal. KINDERHOOK, N.Y.—Golden Harvest Farms has grown from a small apple-growing operation when Doug Grout’s grandfather opened it after World War II, to a multipronged business that includes a retail stand, cider press, distillery, tasting room and barbecue restaurant. But Mr. Grout said he sees a cloudier future for the business due to new state regulations that will require him to increasingly pay more overtime to the farmworkers who pick his apples in the coming years, raising one of his primary costs. “We were looking to buy another orchard, and that whole thing is tabled,” said Mr. Grout, 52 years old, who co-owns Golden Harvest with his father, as he drove between rows of Honeycrisp trees. “We’re stepping away. You’re going to see farms go out of business. This is very shortsighted.” For the apple market in New York, the new regulations will: Cause supply to shift to the left, leading to higher prices and a…
Ayden is the sole proprietor of a shoe repair shop in Atlanta. His business has been increasing for five years and he is now considering opening a second repair shop downtown. Ayden is putting together a plan, estimating costs, projecting potential revenue of a second shop. Ayden is behaving rationally because
Solve for the missing items in the table. Use the space provided for your answer and complete solution
3. Definition of economic costs Jacques lives in San Francisco and runs a business that sells guitars. In an average year, he receives $711,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $411,000; he also pays wages and utility bills totaling $279,000. He owns his showroom; if he chooses to rent it out, he will receive $1,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Jacques does not operate this guitar business, he can work as a financial advisor and receive an annual salary of $31,000 with no additional monetary costs. No other costs are incurred in running this guitar business. Identify each of Jacques's costs in the following table as either an implicit cost or an explicit cost of selling guitars. Implicit Cost Explicit Cost The wholesale cost for the guitars that Jacques pays the manufacturer The wages and utility bills that Jacques pays The rental income Jacques could…

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If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is minus 2 percent. 2 percent. 9 percent. 16 percent.