QUESTION 7 Given the accompanying table, what is the short-run profit-maximizing level of output for the firm? Output Total Revenue Total Cost $4 2 3 1 2 12 16 20 4 14 O 3 units O 4 units 2 units O 5 units
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![QUESTION 7
Given the accompanying table, what is the short-run profit-maximizing level of output for the firm?
Output
Total Revenue
Total Cost
$4
8
3
12
4
16
5.
20
14
O 3 units
O 4 units
O 2 units
5 units
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- Exhibit 23-8 Price and Cost (0) 11 10 O Tvm A WATC AVC 70 90 100 Quality O 5300- O $700 © 51,000/- o $400 190 Price and Cost (ddium) || 10 8 ATC 7 100 150 200 Quantity AVC Refer to Exhibit 23-8. What is the total variable cost of firm A at the profit-maximizing (or loss-tninimizing) level of production?ABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable cost, average total cost and total cost at the current output level. b. Calculate Economic profit and Accounting profit from the figures given below for ABC а. Company. Total revenue $ 500,000 Wages and salaries $ 40,0000 Forgone salary $ 80,000 Interest paid $ 10,000 Forgone rent $ 10,000 Raw materials $ 50,000 Other payments $ 20,000 Forgone interest $ 7,000You are currently in a job as a chef in a restaurant earning $100,000 per year. You are considering opening up a restaurant in a building which you currently own. You estimate that, if you wanted to, you could rent out your building for $25,000 per year to another restaurant. Last year, your revenues and expenses from the restaurant were the following: Revenues $400,000Cost of Food $120,000Salaries/Wages $100,000Utilities $25,000Taxes $20,000 What is your accounting profit? Show your calculations What is your economic profit? Show your calculations Assuming that you are indifferent between being a chef or owning a restaurant, should you open up your restaurant? Explain why. Now suppose that instead of owning the building where your restaurant will be located, you had to pay rent of $25,000 per year for the building. Will your answers to parts 1-3 change? Show your calculations. Explain how and why your answers will change or…
- Interpret in below diagram and determine at what point the short rus firm will shut down their production and why? $300 190 MC ATC $74 100 P=$71 50 Cost and revenue 1 6 Output For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial 7 8 9 10pt AVC 10 MR =P > !!! V AV 2 I.The total cost of Mr. Plow, a snow-removal business, is given in the table below. Quantity adriveways cleared) Abbreviation Formula: Total Revenue TR Total Cost TC $0 $25 20 30 40 50 60 70 80 34 41 46 49 51 54 60 70 95 145 10 100 What is the total profit of cleaning five driveways if the price Mr. Plow can charge is $10 per driveway? s 01/21 VIEW sOLUTION O OF 21QUESTIONS COMPLETED 28 MacBook Pro 59u.om/mod/quiz/attempt.php?attempt3D1579003&cmid%=812962&page%3D19 System (Academit oles of Microeconomics Spring20 fall20 Price MC ATC of P2 P3 stion Q, Q2 Q3 Quantity/time MR Refer to the above figure. Economic profits for this firm are Select one: O a. undetermined without more information. O b. zero. C. positive. O d. negative. pe here to search hp
- Mc Graw Hill apter 10 Problems 1 01:49:26 eBook Price ($) F OU 60 40 20 0 4 8 Output 12 MR 16 of $ Prev D₁ Saved 20 1 of 5 Instructions: Enter your answer rounded to 2 decimal places (i.e. dollars and cents). If there is an economic loss, be sure to include a negative sign (-) in front of your answer. This firm is incurring a (Click to select) ‒‒‒ Help Next > Save & Exit Submit Check my work 2Plant sizes get larger as you move from ATC-1 to ATC-4. Output АТС-1 ATC-2 ATC-3 ATC-4 1,500 $ 10 15 $ 20 $ 30 2,000 8. 12 17 25 2,500 9 10 15 20 3,000 12 8 13 18 3,500 15 11 16 4,000 18 10 9 14 4,500 20 12 7 12 5,000 24 15 11 10 5,500 29 19 13 6,000 35 25 15 9 In the long run, the firm should use plant size ATC-4 for what level of output? Multiple Choice less than 3,000 3,000 to 3,500 5,000 to 5,500 4,000 to 4,5005d What is the relationship between accounting profit and economic profit? Which is relevant for a firm’s decision to continue production and why? Give examples as to what may cause a divergence between accounting and economic profit
- q 0 1 2 3 4 5 6 TFC $5 5 5 5 5 5 5 TVC $0 3 Marginal revenue is 5 9 16 25 36 MC $3 2 4 7 9 11 P= MR $5 5 5 5 5 5 5 TR $0 5 10 15 20 25 30 TC $5 8 10 14 21 30 41 Profit $-5 - 3 0 1 - 1 -5 - 11 A profit-maximizing firm should produce a quantity of 3 units. (Enter your response as a whole number.) marginal cost for the first units of output. If the company decides to produce more than units, the marginal cost would exceed marginal revenue and profit wouldABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable cost, average total cost and total cost at the current output level. b. Calculate Economic profit and Accounting profit from the figures given below for ABC Company. (3 marks) • Total revenue $ 500,000 • Wages and salaries $ 40,0000 • Forgone salary $ 80,000 • Interest paid $ 10,000 • Forgone rent $ 10,000 • Raw materials $ 50,000 • Other payments $ 20,000 • Forgone interest $ 7,000The Calhoun Textile Mill is in the process of deciding on a production schedule. It wishesto know how to weave the various fabrics it will produce during the coming quarter. Thesales department has confirmed orders for each of the 15 fabrics produced by Calhoun.These demands are given in the following table. Also given in this table is the variablecost for each fabric. The mill operates continuously during the quarter: 13 weeks, 7 daysa week, and 24 hours a day.There are two types of looms: dobbie and regular. Dobbie looms can be used to makeall fabrics and are the only looms that can weave certain fabrics, such as plaids. The rateof production for each fabric on each type of loom is also given in the table. Note that ifthe production rate is zero, the fabric cannot be woven on that type of loom. Also, if afabric can be woven on each type of loom, then the production rates are equal. Calhounhas 90 regular looms and 15 dobbie looms. For this problem, assume the time requirementto change…
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