MC and MR Table 2.1: information Quantity MR MC 1 $8.00 $6.00 $8.00 $7.00 3 $8.00 $8.00 4 $8.00 $9.00 5 $8.00 $10.00 Refer to Table 2.1. At an output level of 3 units, this competitive firm should production -in order to maximize profits. O No answer text provided. change ONo answer text provided. O not change

MC and MR Table 2.1: information Quantity MR MC 1 $8.00 $6.00 $8.00 $7.00 3 $8.00 $8.00 4 $8.00 $9.00 5 $8.00 $10.00 Refer to Table 2.1. At an output level of 3 units, this competitive firm should production -in order to maximize profits. O No answer text provided. change ONo answer text provided. O not change

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to Figure 8.1. The firm earns zero profit at what output? Consider the following diagram where a perfectly competitive firm faces a price of $40. O A. O. B. 34 and 79. OC. 54, O D. 67. E. 60. 44 40 31 30 20 10 4 10 20 30 40 50 34 Figure 8.1 60 70 67 79 MC AC AVC D 80 1 OUTPUT
Do all part to both question 1 and question 2 Question 1 (Q is quantity of production) Q TFC TVC TC AFC AVC ATC MC 1 60 15 3 4 50 8 22 140 7 20 8 60 9. 300 10 50 a. Fill out the table. b. Assume the cost table is of the purely (perfectly) competitive firm. Price = $40. What is the equilibrium quantity at that price. c. How much is the Profit/or Loss/or breakeven point d. What is the Marginal Revenue for this question e. Draw the necessary graphs as shown in class. Identify Q, P at equilibrium, and identify the total revenue and total cost areas, and the Profit, or loss or breakeven area which is applicable to this question.
The following five individuals have different utility functions over food (good x) and clothing (good y): 1) u₁(x, y) = 3x²y 2) u₂(x, y) = 2√x + y 3) Uz(x, y) = x0.6y0.4 4) u₁(x, y) = x² + y² 1 5) us(x, y) = x + 3y For each of these people: a) Compute their marginal utilities of good x, MUx = Ju(x,y) MU, = ду du(x,y) ax b) Check whether the property of "more is better" is satisfied for both goods? Explain. [Hint: Check whether marginal utilities are positive assuming positive amounts of good x and good y] ƏMUX əx and marginal utility of good y, c) Does the marginal utility of good x diminish, remain constant, or increase as each of the individuals buys more x? Explain. [Hint: There are 2 ways to do it: 1) visually check what happens to the expression of MUx when x increases (does it decrease, keep constant or decrease?); or 2) take the partial derivative of this marginal utility with respect to x, that is ƏMUx .aMUX ƏMUX If 0, the marginal utility of x is increasing in x] d) Does the…
Note:hand written solution should be avoided.
A5.
1. Fill in this chart and explain why the firm earnsa profit no matter how many units they produce or the price they choose. 2. Using this data, how many units should this firm produce and what price should they chargeassuming they want to profit maximize.
Economic profits may result from: O a. innovation b.risk taking Oc. exploiting market inefficiencies Od. all the above O e. a and b
5,000 Total Cost 10,000 O a.) The profit is maximized. Profit Total Revenue b.) The firm should increase output 15,000 Based on this graph, which of the following statements is true at an output of 7,000 indicated by the green line? Output Oc.) The slopes of the total revenue and total cost curves are equal. O d.) The cost is rising faster than the revenue.
Use Figure 11-5 to answer the following question(s). Cost and Revenue In long run equilibrium, this competitive firm will face a price of $6,200 units $10, 250 units $20, 300 units. $16, 300 units. $20 11 71 10 b 6 a Figure 11-5 טן MC MR ATC AVC 200 250 300 Quantity and produce 13
Figure A Competitive Firm1.2 MC ATC AVC Given Pl =$7.00 P2 $8.50 P3 =$9.20 QI=100.00 A P3 B P2 P1 MR Quantity Q1 Refer to Figure A Competitive Firm1.2. At an output level of Q1, the average fixed cost is about O $0.70 O No answer text provided. O No answer text provided. O S0.80 %24
TABLE S-1 Revenue and Cost Data for a Perfectly Competitive Firm Daily Output Price Total Revenue TFC TVC TC Profit 0. $30 $0 V $0 $40 -$40 1 $30 $30 $40 $12 W -$22 $60 $40 Y $68 -$8 $30 $90 $40 $45 $85 Refer to Table 8-1. What is the AVC of producing three units of output? $15 $32.66 $45 $50 2. 3.
Figure A Competitive Firm1.2 MC ATC Given P1 =$7.00 P2 = S8.50 P3 = SS.80 Ql = 120.00 AVC A P3 P2 P1 MR C Quantity Q1 Refer to Figure A Competitive Firm1.2. At an output level of Q1, the average fixed cost is about O $0.50 O $0.30 O No answer text provided. No answer text provided. %24