PROFITABILITY AND THE MARKETPRICEPrice, costof free$30Break-evenpricejust highMCMinimum averagelolal cost1814If the price isenough tocover ATC andATC if it chooses theMRP Q whereMR=MC thefirm will break010203030even.40506070Quantity of treesMinimum-costoutputQ1 Calculate Profit in the above diagramPROFITABILITY AND THE MARKETPRICEPrice, costof treeBreak-evenpriceMarket price = $10Minimumaveragetotal costMCThe farm's per unitloss: $10.00 -$14.67=-$4.67.Total loss: 3 x-$4.67 = approx.ATC (-$14.00).$14.6714.00CLossMR = P10.00A010202030404050506070 Quantity of treesQ2 Show the detailed Calculation of Profit(Loss), Using theformula TR-TC=p.Q-c.QIn the above example p=$10What is ATC at equilibrium output 40?What is the amount of loss? Show detailed calculation

To calculate the profit or loss in the given diagram, we can use the formula: Profit (or Loss) =…

Answered: PROFITABILITY AND THE MARKET PRICE…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 16CTQ: Would you rather have efficiency or variety? That is, one opportunity cost of the variety of...

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Similar questions

What is an externality?
Think back to a purchase that you made recently. How would you describe your thinking before you made that purchase?
What is die difference between accounting and economic profit?
The state of Colorado requires oil and gas companies who use fracking techniques to retune the land to its original condition after the oil and gas extractions. Table 12.9 shows the total cost and total benefits (in dollars) of this policy. Calculate the marginal cost and the marginal benefit at each quantity (acre) of land restored. See Production. Costs and Industry Structure if you need a refresher on how to calculate marginal costs and benefits. If we apply marginal analysis, what is the optimal amount of land to be restored?
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?
What is productive efficiency? Allocative efficiency?
If the transit system were regulated to provide the most allocatively efficient quantity of output, what output would it supply and what price would it charge? What subsidy would be IIECESSEIIY to insure this efficient provision of transit services?
What are four responses to the claim that people should not behave in the way described in this chapter?
What is the free rider problem?
Becky and Sarah are sisters 1who share a room. Their room can easily get messy, and their parents am always telling them to tidy it. Here are the costs and benefits to both Becky and Sarah, of taking the time to clean their room: If both Becky and Sarah clean, they each spends two hours and get a clean room. If Becky decides not to clean and Sarah does all the cleaning, then Sarah spends 10 hours cleaning (Becky spends 0) but Sarah is exhausted. The same would occur for Becky if Sarah decided not to cleanâ€”Becky spends 10 hours and becomes exhausted. If both girls decide not to clean, they both have a dirty room. What is the best outcome for Becky and Sarah? What is the worst outcome? (It would help you to construct a prisoners dilemma table.) Unfortunately, we know that the optimal outcome will most liker not happen, and that the sisters probably will choose the worst one instead. Explain what it is about Beckys and Sarahs reasoning that will lead them both to choose the worst outcome.
Consider the case of global environmental problems that spill across international borders as a prisoners dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can cheese whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two centuries. In Table 12.10, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.

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