in The diagram illustrates the demand curve, isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Assume that MQ Motors currently chooses to operate at Point E. Which statement correctly describes the market of MQ2020? 10,000 Price, marginal cost (5) Pr = $5.440 A B 0 Qr=32 D Qo Quantity of cars, Q Marginal cost Isoprofit curve $150,000 Isoprofit curve 563.360 Demand curve 120 Select one: O a. Total surplus is not being maximised. Ob. Deadweight loss is the loss incurred by MQ Motors for not selling more cars. 05 All possible gains from trade are being achieved as MQ Motors operates at its profit-maximising output and price. The amount of consumer surplus is the area ADP- Oe. Pareto efficient allocation is currently being achieved.

in The diagram illustrates the demand curve, isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Assume that MQ Motors currently chooses to operate at Point E. Which statement correctly describes the market of MQ2020? 10,000 Price, marginal cost (5) Pr = $5.440 A B 0 Qr=32 D Qo Quantity of cars, Q Marginal cost Isoprofit curve $150,000 Isoprofit curve 563.360 Demand curve 120 Select one: O a. Total surplus is not being maximised. Ob. Deadweight loss is the loss incurred by MQ Motors for not selling more cars. 05 All possible gains from trade are being achieved as MQ Motors operates at its profit-maximising output and price. The amount of consumer surplus is the area ADP- Oe. Pareto efficient allocation is currently being achieved.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Question Figure 7.11 depicts the demand curve for Beautiful Cars, together with the marginal cost and isoprofit curves. At point E, the quantity-price combination is (Q", P*) = (32, 5,440) and the profit is $63,360. Suppose that the firm chooses instead to produce Q = 32 cars and sets the price at P = $5,400. Which of the following statements is correct? 10.000 L000 Marginal cast seprof curve eprafit carve $30,000 av 0 Denand curve 100 120 Quantity of cars, Q O The profit is reduced to $62.080. The average cost of production is $3.400. O The profit remains the same at S63.360. O The firm is unable to scll all the cars. 5) asao peudeu'a
Fruit market (a perfectly competitive market), the industry demand and supply of tomato (a homogenous product) is given by the following equations respectively: Qd = 50 − P Qs = 1 + 3P The typical firm’s total cost is given by the following equation: TC = 10 + 0.5Q2 + 5Q What is the profit maximizing level of output for the firm? How much profit is this firm earning? Show it graphically Is it short run or long run? Explain!
For Parts (A) through (C) below, refer to the figure and table below. The figure below displays the short-run MC, AVC, and AC for a firm. The table displays the MC, AVC, and AC at specific levels of output for the same firm. q 0 4 6 MC(q) AVC(q) 10 10 6 6 14 8 AC(q) ∞ 15 14 MC(q) B) If the price of the good is $15 (p = 15), select the statement below that is true: A. The firm's profit in the short-run will be negative ( 0) in the short-run, what is the lowest the price (p) could be? D. The firm's profit in the short-run will be positive (π > 0). E. There is not enough information to know whether the profit will be greater than, less than, or equal to zero. AVC(q) > 8 60.00 9
Fruit market (a perfectly competitive market), the industry demand and supply of tomato (a homogenous product) is given by the following equations respectively: Qd = 50 − P Qs = 1 + 3P The typical firm’s total cost is given by the following equation: TC = 10 + 0.5Q2 + 5Q What is the profit maximizing level of output for the firm? How much profit is this firm earning? Show it graphically Is it short run or long run? Explain!
Assume a competitive firm faces a market price of $100, a cost curve of: C= 1.00g + 25g + 1,600 and a marginal cost curve of: MC = 2.00g + 25. The firm's profit maximizing output level is 37.50 units, the profit per unit is $-5.17, and total profit is: $-193.88. However, if the firm wanted to maximize the profit per unit, how much would it produce? It would produceunits. (round your answer to two decimal places) If the firm produced this output level, what woulid be the profit? Its profit would be $. (round your answer to the nearest penny)
Problem 2. Suppose the market demand and inverse-demand for pizza in East Lansing is given by: Demand: Qd 1100-5P 220-2₁ Inverse-Demand: P = 220- Currently, there are 100 pizza stores in the East Lansing area that produce identical pizzas and as such the market is perfectly competitive. Suppose each pizza store has identical cost function given by: C(q) = 100 +g+q², fixed-cost I MC(q)=1+2q where C(q) is the total cost, and MC(q) is the marginal cost function. As shown in the total cost function, each pizza store incurs a $100 fixed cost which is a sunk-cost in the short-run but avoidable in the long-run. Recall that the market supply is the sum of individual firm's supply functions, and that individual's (inverse) supply curve is given by its marginal cost function i.e. Individual firm's inverse-supply: P= mc(q) = 1 + 2q Individual firm's supply: 9,= 0.5P - 0.5 Market Supply: 2, 100q, = 50P - 50 (a) What is the short-run equilibrium market price/quantity of pizza in East Lansing? (b)…
What is the firm's profit from both markets? Please provide a numerical answers in billions of dollars. For example, if the answer is 7,850,000,000 (7 billion and 850 million dollars), put 7.85 in the answer field.
A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2 What are the firm’s short-run profits? What adjustments should be anticipated in the long run? Given these adjustments, calculate the new optimal quantity and price.
Please explain correctly and clearly.
The table below shows the average cost (AC) for a purely competitive market. The average revenue (AR) is constant at RM5 per unit and the firm’s total fixed cost (TFC) is RM4. If the average revenue falls to RM3 per unit, calculate the firm’s new profit or loss at the equilibrium. Based on your answer, should the firm continue or stop the production? Justify. Output (Units) Total Revenue (RM) Average Cost (RM) Total Cost (RM) Marginal Cost (RM) Marginal Revenue (RM) 1 8.0 2 5.5 3 4.0 4 3.5 5 3.8 6 4.5 7 6.0
AMCO is a firm producing tables in Spain. It has a fixed cost of 100$ and a cost per unit of production of 2$. The demand function for a table is given by: P = 60 - 4Q 1. Find the equations of TR and TC. 2. Write down the equation of the profit. 3. Find Qwhen TR = 0 (x-intercept/roots). 4. Find Qwhen TR is a maximum. 5. Deduce the maximum total revenue (TR max).
Please solve only the fourth sub question. That is (4) only