Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in thismarket.PRICE (Dollars per oven)100908070403020100050MCATCAVC10 15 20 25 30 35QUANTITY (Thousands of ovens)404550(?) 005 10 15 20 25 30 35 40QUANTITY (Thousands of ovens)For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at thatquantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down,it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.)Price(Dollars per oven)25.0070.00100.0045 50Quantity(Ovens)Total Revenue Fixed Cost(Dollars)(Dollars)1,600,0001,600,0001,600,000Variable Cost(Dollars)Profit(Dollars)If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $1,600,000 per day. In other words, if itshuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease).This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-isper oven.

Calculated in a table are total revenue, fixed costs, variable costs, total costs, and profits…

Answered: Suppose that the market for microwave…

Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Ĉ 100 90 80 70 ATC ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Sketch a marginal cost curve for a firm that has constant marginal costs of production up to its capacity of 500 units but which cannot increase its output beyond that capacity PLEASEE SHOW THE CURVE
Suppose that a firm's long-run average total costs of producing smart phones increases as it produces between 50,000 and 60,000 smart phones. For this range of output, the firm is experiencing
Briefly write the behaviour of Average fixed cost when output increase
How would you calculate the marginal cost of your firm's output? (think of a single product, not an industry).
Suppose you own an acre of land. You could grow crops on that land. The cost of seeds is $100. The crops you grow from those seeds will sell for $350. You could also rent the land to another farmer. The rent you could eam is $300. Calculate your economic profit. (Do not include a $ sign in your answer.) Answer: Suppose the total cost function for a firm is given by: TC= 100 + 2q +0.5q2. Find the marginal cost function and then use that to determine the marginal cost of the 10th unit. (Do not include a $ sign in your response.) # Answer:
What would be the profit earned by the firm if his total revenue is $490 and the total costs are $500
What is Product Expansion?
Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus' output during a given day. I have completed the first two rows. Workers Output Marginal Total Average Marginal Product Cost Total Cost Cost $200 1 20 20 $300 $15 $5 2 50 30 $400 $8 $3.33 3 90 40 4 120 30 140 20 150 10 7 155 5
Imagine a small juice producer named " Bilberry Infused Beverages" known for its refreshing beverages. The owner, Louis, keeps track of the production costs. Recently he decided to expand his operations and produce more Juices to meet the increasing demand. Table 15.1 below shows the data he has collected: Complete Table 15.1 below and use the information to answer the question that follows. Table 15:1 Production Costs for Bilberry Infused Beverages Output Total cost Fixed cost Variable cost Marginal Average cost cost Average fixed cost D 30 0 1 10 2 18 3 22 4 56 6 5 64 6 76 7 8 15 15 What is the marginal cost of producing the 8th unit of the good? a) 4 b) 10 12 d) 29
Are fixed costs also sunk costs? Explain.
will need to upload your answers. Assume a company is producing 600 units of output per day and minimizing total cost with the following isoquant graph. Both the price of labor (w) and the price of capital (r) are $100 per day. Now assume they want to increase production to 800. Use the graph and complete sentences (and the numbers from the situation provided) to explain whether marginal cost would be higher in the short run or long run or will the MC be the same in both the SR and LR. That is, what is the MC is the short run and the MC in the long run? Explain. KI
Why is the existing firm experience will get normal profit in the long run?