Refer to the short-run graph data below. The profit-maximizing output for this firm is: A. above 440 units. B. 440 units. C. 320 units. D. 100 units. $1,400 1,200 1,000- 800- 600 400 200 0 100 Total Cost Total Revenue 320 440 Output

Refer to the short-run graph data below. The profit-maximizing output for this firm is: A. above 440 units. B. 440 units. C. 320 units. D. 100 units. $1,400 1,200 1,000- 800- 600 400 200 0 100 Total Cost Total Revenue 320 440 Output

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

Refer to the short-run graph data below. The profit-maximizing output for this
firm is:
A. above 440 units.
B. 440 units.
C. 320 units.
D. 100 units.
$1,400
1,200
1,000-
800
600
400
200
0
100
Total
Cost
320 440
Output
Total
Revenue

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QUESTION 20 Study the table below which represents the cost and price schedules facing a perfectly competitive firm that manufactures bulbs. Use this information to answer the question. Quantity of the product 0 1 2 3 4 Price per unit (R) 10 10 10 10 10 10 c) d) 38022222 Total revenue Total profit (R) -10 -9 -5 -6 Marginal cost (R) . 9 6 8 10 13 Average variable cost (R) 9,00 7,50 7,67 8,25 9,20 This perfectly competitive firm will produce a) 3 bulbs, since losses are minimised. b) 4 bulbs, but it will consider shutting down in the short run. 4 bulbs, since at this production level it earns normal profit. 4 bulbs and will stay in operation.
3. A firm has fixed cost of $90.00 and variable costs as indicated in the table below. Complete the table. TC AFC AVC ATC MC TP TFC TVC 0 $ 90.00 $ - 1 2 3 4 5 6 $ 90.00 $ 50.00 $ 90.00 $ 90.00 $90.00 $125.00 $ 90.00 $155.00 $ 90.00 $190.00 $ 90.00 $230.00 7 $ 90.00 $275.00 89 8 $ 90.00 $ 330.00 9 10 $ 90.00 $395.00 $ 90.00 $470.00
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8. Consider a firm's short run and long run average costs depicted below: 300 270 240 210 180+ Wunt 150 120+ 90 60 30 ---- W X AC LRAC 200 400 600 800 1000 1200 1400 1600 1800 2000 # of units Suppose this firm has been producing 400 units per month for a long time. If it decides to increase its output to 800 units per month, then its average cost will O A. fall from $300/unit to $150/unit initially, then rise to $240/unit eventually. O B. fall from $300/unit to $60/unit initially, then rise to $240/unit eventually. O C. fall from $300/unit to $60/unit and remain there. O D. fall from $300/unit to $240/unit and remain there. O E. rise from $150/unit to $240/unit initially, then fall to $60/unit eventually. OF. rise from $150/unit to $300/unit initially, then fall to $60/unit eventually. O G. fall from $150/unit to $60/unit and remain there. OH. rise from $150/unit to $240/unit and remain there.
Price and costs (dollars per unit) 25 820 15 10 5 O PER A MR The restaurant capacity output is 12 16 20 24 Quantity (units per day) MC ATC meals, the restaurant produces profit, therefore the restaurant capacity is underutilized by. a) 8, 4, $60, 4 meals b) around 12, 8, $80, 4 meals c) 16, 8, normal profit, 8 meals d) 20, 8, $80, 12 meals meals and earns meals.
The firm will A-increase its marginal revenue B increased its profits C decrease its marginal revenue D maximize its profits
$30 $28 $26 $24 $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 5 MC АТС AVC MR = P 10 15 20 25 30 35 40 45 50 55 Output (Q) The firm shown in the diagram above will be making a of in the short run. loss; $150 profit; $100 profit; $200 loss; $140
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400 300 200 120 100 100 220 320 400 500 580 a) $300 or less b) $120 Refer to the above Figure A. In the short-run this firm would shut-down at a price of c) $100 MC d) $200 or less /ATC AVC
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