Answered: Price ($) 8. Using the information in…

Price ($) 8. Using the information in Figure 7, calculate the total profit or total loss made by this firm. (LO 22-2) 100 80 60 40 noi 20 0 4 8 FIGURE 7 Output MC ATCA MR 12 16 DO 22 22 2

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter22: Getting Divisions To Work In The Firm’s Best Interests

Section: Chapter Questions

Problem 22.1IP

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The following figure shows the revenue and cost curves for a firm X. RM 10 a. b. C. 7 6 LO 5 4 3.5 0 20 25 30 MC 40 AVC AC AR=MR Units If a firm X achieves productivity efficiency, what will be the total revenuel generated At what price will a firm stop operating? Please explain. If the market price is RM4.00, what is the total profit or total loss.
Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
2. Suppose you are the manager of a local restaurant. Prior to COVID-19 you served an average of 300 meals a day at a price of $15. You are trying to stay open even though restaurants are limited to 50% capacity. To offset the reduced seating capacity you raised your price to $18 and are now serving 160 meals a day with both dine in and take out. Compute the Total Revenue for your restaurant at the $15 price and the total revenue at the new $18 price. Did your total revenue rise or fall? Use the mid-point formula to calculate the price elasticity of demand between these two price points. Does this represent Elastic or Inelastic demand? Finding it difficult the keep the restaurant open at 50% you consult with a local Economist who suggests that you should try reducing your prices to bring in more customers. You drop your price down to $16 and find that sales increased to 200 customers a day. Compute the Total Revenue for the restaurant at the new $16 price. How does this compare…
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Rod N. Reel owns a dealership that sells fishing boats in an open price-searcher market. To develop his pricing strategy, Rod hired an economist to estimate his demand curve. The first two columns of the chart provide the data for the expected weekly quantity demanded for Rod's fishing boats at alternative prices. Rod's marginal (and average) cost of supplying each boat is constant at $7,000 per boat, no matter how many boats he sells per week in this range. This cost includes all opportunity costs and represents the economic cost per boat. Complete the following table by finding the total revenue and total cost per week at each quantity, the marginal revenue and marginal cost from the sale of each additional boat, and the economic profit per week at each quantity. Price of Fishing Boats $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 Fishing Boats Sold (Boats per Week) 0 1 2 3 4 5 True Total Revenue ($ per Week) $ $ $ $ $ If Rod wants to maximize his profits, he should charge a price of…
Remi owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Remi could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His economic profit last year was O $89,000 O $94,500 O $97,000 O 554,000 O $62,000
(a) Find the total profit or total loss of the firm shown in Figure 9. (b) is the firm in the short run or the long run? (c) How much is the firm's most efficient output? (8) the firm would accept in the long run? (LO 21-5, 21-6, 21-7) FIGURE 9 2 Price ($) 10 19 8 6 5 4 3 0 10 20 30 40 50 Output MC 60 70 ATC 80 D. MR 90 100 page 610 +
Calculate Madison's marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per phone case) 40 35 30 25 20 15 10 O 0 O ☐ 1 O 2 O □ O O ☐ O O 3 4 5 QUANTITY (Phone cases) ☐ 6 7 8 Marginal Revenue Marginal Cost I Madison's profit is maximized when they produce a total of 5 phone cases. At this quantity, the marginal cost of the final phone case they produce is $ an amount than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is $ , an amount than the price received for each phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the curves. Because Madison is a price taker, the…
Suppose that the company is willing to consider dropping the distribution centerlimitations; that is, customers could be served by any of the distribution centers forwhich costs are available. Can costs be reduced? If so, by how much? show all excel working
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Short-Run P Marginal Cost $105 Average Total Cost Average Variable Cost $88 $55 460 1675 600 Refer to Figure 8-3-2. When the market price equals $50, what is the profit maximizing output? 675 O 460 O 600