Problem 06-04 For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit- maximizing level of output and how much profit will this producer earn if the price of pizza is $2.50 per slice? Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Then, indicate the profit-maximizing level of output on the graph. Price ($/slice) 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 Cost Curves Select Select Quantity (slices/day) Select 100 200 300 400 500 600 700 800 900 Tools -i At the profit-maximizing level of output, the producer's profit is: $ per day. 0

Problem 06-04 For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit- maximizing level of output and how much profit will this producer earn if the price of pizza is $2.50 per slice? Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Then, indicate the profit-maximizing level of output on the graph. Price ($/slice) 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 Cost Curves Select Select Quantity (slices/day) Select 100 200 300 400 500 600 700 800 900 Tools -i At the profit-maximizing level of output, the producer's profit is: $ per day. 0

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 41P: Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72...

See similar textbooks

Related questions

Q: 3.00 2.75 2.50 2.25 2.00 1.75 81.50 1.25 1.00 0.75 0.50 0.2 0 seject Select Select 100 200 300 400…

A: Profit maximization refers to the strategic endeavor undertaken by a company to optimize its…

Q: Consider an airline’s decision about whether to cancel a particular flight that hasn’t sold out. The…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: A particular computing company finds that its weekly profit, in dollars, from the production and…

A: Marginal profit is the additional profit earned when an additional unit of output is produced.

Q: The graph below depicts the short-run cost curves for a typical fast-food restaurant in a mall. Due…

A: The marginal revenue refers to the revenue a firm generates from the sales of one more unit of a…

Q: 14.The demand function for a new product is p(x) = - 2x + 7 , where p is the selling price of the…

A: Profit is the difference between total revenue and total cost. Total revenue is the product of price…

Q: For the pizza seller whose marginal, average variable, and average total cost curves are shown in…

A: Economics is a social science that studies how individuals, businesses, governments, and societies…

Q: Fig 2.1 illustrates the law of diminishing returns in seeking the optimum system (or component)…

A: The Law of Diminishing returns refers to the marginal return states that adding an additional factor…

Q: total revenue (TR) and total variable cost (VC) if the price is equal to the AVC

A: Relationship between TR and TVC 1. TR represents sum of MR and TVC represents Sum of MC Gross…

Q: A used car dealership rents 210 cars for $9 a day. They want to increase the price to maximize their…

A: Profit maximizing refers to a scenario at which a firm is getting maximum profit at producing at a…

Q: Kendra bought 208 donuts for $80. Her profit was $45 once she had sold 100 donuts. Which equation

A: Kendra bought 208 donuts for $80. Her profit was $45 once she had sold 100 donuts. The equation…

Q: calculate the total revenue if the firm produces 20 versus 19 units. Then, calculate the marginal…

A: Total Revenue is the value of earnings of the firm on question. It is the product of price charged…

Q: Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only…

A: The table below shows the long-run ATC which is made by analyzing the minimum costs that the…

Q: Let the demand function for a product be given by the function D(q) = -1.65q + 270, where q is the…

A: The positive difference between the revenue earned from selling goods, providing services, or…

Q: What effect might a decrease in the demand for high definition televisions have on the short-run…

A: In this case, there would be no effect of the demand for high-definition television on the short run…

Q: For the pizza seller whose marginal, average variable, and average total cost curves are shown in…

A: In the given market, price is constant so it will be equal to marginal revenue. At profit…

Q: Suppose function of Total Cost (TC) is the following: CT = 300 + 3Q + 2Q2 Where AT is total costo…

A: Answer to the question is as follows:

Q: Determine the quantity of output that generates the maximum profit. Use the green points (triangle…

A: The profit of a firm is the revenue generated from its business. It includes the explicit and…

Q: 8. Consider the following cost function: C(Q) = 20Q³ – 15Q² + 10Q. Answer the following questions:…

A: cost function is a function that maps an event or values of one or more variables onto a real number…

Q: Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The…

A: NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: For the pizza seller whose marginal, average variable, and average total cost curves are shown in…

A: Profit-Maximizing Output = 360 Profit = - 126 (Note: It's a LOSS, so kindly put the negative sign)…

Q: "The Hickory Cabinet and Furniture Company makes chairs. The fixed cost per month of making chairs…

A: The profit of a function is the return one gets after making paying all the costs. That is,…

Q: Suppose that a firm's total cost equation is TC= 10,000+ 1000 + 0.25Q2 Where TC is total cost and…

A: Average Total cost(ATC) is total cost per unit. It is calculated by dividing total cost to…

Q: 4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in San Diego. The…

A: Table is completed by using below formula is shown below. MC=Change in TCChange in Q FC=TC at Q=0…

Q: operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers…

A: Since you have posted a question with multiple sub- parts, we will solve first three subparts for…

Q: Happy Go Lucky Electric Company is the only company providing electric power to the city of Go…

A: Given that Happy Go Lucky Electric company is the only company providing electric to the city of Go…

Q: The diagram displays short-run cost curves for a facility that produces liquid crystal display (LCD)…

Q: Price ($/slice) For the pizza seller whose marginal, average variable, and average total cost curves…

A: 550, $550Explanation:First of all, let us identify the curves. We will do this by identifying their…

Concept explainers

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?

Question

Problem 06-04
For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-
maximizing level of output and how much profit will this producer earn if the price of pizza is $2.50 per slice?
Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Then, indicate the
profit-maximizing level of output on the graph.
Price ($/slice)
3.50
3.25
3.00
2.75
2.50
2.25
2.00
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0
Cost Curves
Select
Select
Quantity (slices/day)
Select
100 200 300 400 500 600 700 800 900
Tools
-i
At the profit-maximizing level of output, the producer's profit is: $
per day.
0

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define cost.

VIEW

Step 2: Calculate the profit maximizing quantity and profit.

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

X 1 ences If the price of oats is $3.0 per kilo, calculate the total revenue and the total profit (or loss) at the quantities shown in below table. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Leave no cells blank - be certain to enter "0" wherever required. Mc Graw Hill Quantity (kilos) Total revenue Total cost Total profit $ 600 1800 $1,900 700 2100 $2,000 $ 800 2400 $2,400
Principles of Microeconomics Name: Homework #3 Prof. R. Harris DUE: Wednesday, April 17, 2019 at the beginning of class - NO EXCEPTIONS. Please remember to show all work and please be neat. Please staple this if you print it on your own. 1. Consider the following table of numbers, which represents demand and cost conditions for a com firm. petitive TR 600 0 1 2 $o $400 600 $400 $240 600 $430 $670 $960 $1,350 $1,840 $2,440 $3,120 $3,910 $4,800 600 600 600 600 600 600 5 6 7 600 600 9 10 (a) Fill in the missing values (b) Use the information in the chart to determine what level of output the firm should produce. Explain your reasoning.
A 155.
Table 1. Hypothetical Cost Schedule Quantity TFC TVC TC 0 30 0 1 30 15 2 30 20 3 30 23 4 30 28 5 30 38 6 30 60 From the given table 1, show the graphical solution where quantity is the X-axis, and TFC, TVC, TC is the Y-axis and what does the graph implies
for this graph answer the following question what is the total revenue? what is the total profit? what is the maximun point?
On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per scooter. TOTAL REVENUE (Dollars) 2610 2430 2250 2070 1890 1710 1530 1350 1170 990 Δ ΔΔ Δ 0 25 50 75 100 125 150 175 200 225 250 275 300 325 PRICE (Dollars per scooter) Total Revenue ? According to the midpoint method, the price elasticity of demand between points A and B is approximately 0.69 ▼ Suppose the price of scooters is currently $125 per scooter, shown as point A on the initial graph. Because the demand between points A and B is inelastic , a $25-per-scooter decrease in price will lead to a decrease in total revenue per week.
We have the results from our first Facebook ad campaign. The following table summarizes the results broken down by age and whether the person seeing the add clicked through. Age 40 or under 85 Age more than 40 65 Total Clicked Through 150 Did Not Click 590 260 850 Total 675 325 1000 For our up(combing) (pun intended) campaign, I want to make it as effective as possible, a cut above all other ad campaigns! I'm thinking that since 85 (or 56.7%) of the 150 people who clicked through to our website are age 40 or less, we should focus our ads to only younger people. I'm not great with number though, and since I know you had a stats class in college, I wanted to get your opinion. Should we focus our adds only to those age 40 and under or should we do something else?
Consider total cost and total revenue given in the following table: TABLE IN IMAGE Calculate profit for each quantity. How much should the firm produce to maximize profit?(ii) Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points betweenwhole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2½.) At what quantitydo these curves cross? How does this relate to your answer to part (a)?(iii) Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in along-run equilibrium? (8.75)
$10 ATC 8 AVC 10 20 30 40 Quantity Using the above graph, calculate the firm's total cost of producing 30 units of output. $8 O $120 $180 $240 The graph is showing you average total cost. The question asks you to use it to calculate total cost. Price 642
Costs and Profit Maximization: Work It Out 1 Suppose Margie decides to lease a photocopier and open up a black-and-white photocopying service in her dorm room for use by faculty and students. Her total cost, as a function of the number of copies she produces per month, is given in the table. Number of Photocopies Per Month Total Cost Fixed Cost Variable Cost Total Revenue Profit 0 $100 1,000 $110 2,000 $125 3,000 $145 4,000 $175 5,000 $215 6,000 $285 a. Fill in the missing numbers in the table, assuming that Margie can charge 6 cents per black-and-white copy. Margie's fixed cost is: $ Variable cost, 0 photocopies/month: $ Variable cost, 1,000 photocopies/month: $ Variable cost, 2,000 photocopies/month: $ Variable cost, 3,000 photocopies/month: $ Variable cost, 4,000 photocopies/month: $…
Use the graph above to answer these questions: What is the profit-maximizing level of output? What is the economic profit? What is the per-unit amount of profit at the profit-maximizing level of output?
How does fixed cost affect marginal cost? Why is this relationship important?