If the marginal revenue is greater than the marginal cost at a certain level of production, then the firm should respond by: a. Decreasing production. b. Firing workers. c. Increasing production. d. Exiting the market.

Q: Refer to Figure 1. When the price of the good is $14, the firm's maximum profit is a. $240. b. $180.…

A: What are the cost curves? A firm's total cost (TC) is the sum of the production's variable cost…

Q: A bookstore sells 90 textbooks at a price of $70 a book. The average total cost is $50 per textbook.…

A: Given that : Number of textbooks = 90 Price of a book = $ 70 Average total cost = $ 50

Q: competitive market price is $60, and a competitive firm’s total costs = q^2 - 6q + 990 and marginal…

A: * SOLUTION :-

Q: A competitive firm is maximizing its profit by selling 150 units of output. The firm’s marginal cost…

A: The objective of the question is to calculate the profit of a competitive firm that is maximizing…

Q: Draw a market graph showing a downward-sloping demand curve and a horizontal supply curve. The firm…

A: Demand curve depicts the inverse relationship between the price and quantity demanded whereas supply…

Q: Using the graph on the next page, do the following problems: Determine the profit maximizing level…

A: The marginal cost (MC) curve is calculated by dividing the change in total cost by the change in…

Q: Assume that the marginal cost curve is given by MC(qi) = 6 + 4qi. And the average variable cost is…

A: MC = 6 + 4qi AVC = 6 +8qi+ 2qi.

Q: Research and Development money spent by pharmaceutical companies creating new drugs is a sunk cost…

A: A sunk cost refers to those costs that company already been incurred and cannot be recovered. Sunk…

Q: Suppose the equilibrium price of a good in a perfectly competitive market is $15. A firm in the…

A: In perfect competition, there are many firms selling identical goods. All parties involved have full…

Q: e shapes of firms' cost curves are important because they help us determine how the firm will…

A: The cost curve is the curve that is a graphical representation of the firm's cost at different…

Q: When price equals marginal cost, Select one: A. the industry is in long-run equilibrium. B. firms…

A: Marginal cost is a significant concept in economics that determines the additional cost incurred by…

Q: True or false: Profit is the difference between the total revenue generated and cost of goods sold.…

A: Profit is the difference between the total revenue generated and the cost of goods sold (COGS) or…

Q: In a perfectly competitive industry, firms are likely to Multiple Choice A.) exit when there are…

A: Introduction When there are numerous buyers and sellers, perfect competition results in prices that…

Q: In imperfectly competitive markets a )     some competition may exist but only in price and not in…

A: Imperfect markets are such markets that do not follow rules and regulations of perfect market such…

Q: Which of the following indicates an extremely profitable market in the short-run? a. Many more firms…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: Total Fixed Costs + Total Variable Costs = W %3D Multiple Choice The Supply Curve. The Marginal…

A: Total fixed cost refers to the cost that is independent of the output level produced. Total variable…

Q: Marcy owns a photography business in Mobile, Alabama. The market for photography is very…

A: The objective of the question is to determine the best course of action for Marcy to maximize her…

Q: Economic profit is... A-inclouded in the firm’s total opportunity cost . B-equal to normal profit…

A: Profit refers to the financial benefit realized by an individual or a firm when the revenue…

Q: In the short run, perfectly (or purely) competitive firms will maximize their profit by producing…

A: This can be defined as a cost that shows the type of cost that an individual, business, or any other…

Q: Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in…

A: (Since you have asked many questions, we will solve the first one for you. If you want any specific…

Q: nder which circumstances should a competitive firm shut down production even in the short term?…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: Using the graph for the questions : A. There are fixed costs of $50 no matter what the output level…

A: The profits are maximizes profit when the value of the last unit of a good (i.e. marginal revenue)…

Q: Q: How would each of the following affect the market supply curve for tobacco plant in North…

A: A market supply curve is a graphic representation of several separate supply curves put together.…

Q: Use the data below to answer the questions: Price Quantity Demanded Total Revenue Marginal Revenue…

A: Profit maximising point is that point where marginal revenue and marginal cost are equal. (d).…

Q: The price of a product is expressed as p, PHP = 10 – 28D where D is the demand. Which of the…

A: Given Price function P = 10 – 28d

Q: In a perfectly competitive market, MR = Instructions: In order to receive full credit, you must make…

A: By definition, MR = change in the total revenue due to 1 addition unit sold in the market  => MR…

Q: The table represents the demand (quantity at each price) for and the total cost to produce a firms…

A: The table represents the demand (quantity at each price) for and the total cost to produce a firms…

Q: Consider the following model of a firm. The firm can sell any number of units at the constant price,…

A: Marginal cost:Marginal cost is the additional unit that is added to the total cost. It is calculated…

Q: Currently the firm is producing at a profit maximizing quantity of output and has a total revenue of…

A: Marginal cost is the additional cost of producing one more unit of a good. Marginal revenue is the…

Q: Doug produced 100 donuts but only sold 90 of them. The average cost of production for each donut was…

A: Demand curve represents a negative relationship between price and quantity demanded. Increase in…

Q: There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of…

A: a. There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size…

Q: A competitive firm maximizes profit when marginal cost: a. equals the price. b. is less than the…

A: There are many firms offering the same identical products in a market system with perfect…

Q: Mindy's salon is a small business that acts as a price taker (MR=P). The prevailing market price for…

A: Total cost(TC) is the cost a firm incurs during the production process. It includes both fixed cost…

Q: A profit-seeking firm should expand its output so long as: O marginal revenue exceeds marginal cost…

A: In the market, different types of firm has differences in their production and pricing decision. A…

Q: Dave's Donuts sold 1,000 donuts. Total revenue was $400, and the cost of producing the 1,000 donuts…

A: The amount of money received by businesses from the sale of their products is referred to as total…

Q: Would a firm earning zero economic profit continue to produce, even in the long run? In long-run…

A: Competitive market is the market where there are large no. of sellers selling the same good.    A…

Q: A company has established that the relationship between the sales price for one of its products and…

A: Maxmum profit is the every firm's objective. And it is achieved when marginal revenue and marginal…

Q: Is the firm maximizing profit? 2. What quantity of output should the firm produce in the long run

A: 1. Given the values: TC = 70 + 10q + 2q2MC = 10 +4q Price = MR = $20 At profit maximizing, MR=MC MR…

Q: A seller in a perfectly competitive market can increase his profits in the short run by: (i)…

A: As there are many firms in the perfect competitive market, so if a single seller increases his…

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?