**Table 14-9**Suppose that a firm in a competitive market faces the following revenues and costs:| Quantity | Total Revenue | Total Cost ||----------|---------------|------------|| 0 | $0 | $10 || 1 | $9 | $14 || 2 | $18 | $19 || 3 | $27 | $25 || 4 | $36 | $32 || 5 | $45 | $40 || 6 | $54 | $49 || 7 | $63 | $59 || 8 | $72 | $70 || 9 | $81 | $82 |Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to:- $6.- $8.- $7.- $9.**Explanation of Data**The table presents a scenario for a firm in a competitive market, detailing how quantity produced affects total revenue and total cost. The goal is to determine the optimal production level by comparing marginal revenues and the given cost options. The decision point for profit maximization is where marginal revenue equals marginal cost.

We are going to use concepts such as marginal analysis to decide the output level which maximises profit for competitive firm.For competitive market, Price is always equal to marginal revenue and is constant for any level of the output. Profit is maximised when Price =Marginal Revenue = Marginal Cost Let's work out marginal revenue and marginal cost for the given schedule of revenue and cost. Q TR MR TC MC 0 0 $ 10.00 1 $ 9.00 $ 9.00 $ 14.00 $ 4.00 2 $ 18.00 $ 9.00 $ 19.00 $ 5.00 3 $ 27.00 $ 9.00 $ 25.00 $ 6.00 4 $ 36.00 $ 9.00 $ 32.00 $ 7.00 5 $ 45.00 $ 9.00 $ 40.00 $ 8.00 6 $ 54.00 $ 9.00 $ 49.00 $ 9.00 7 $ 63.00 $ 9.00 $ 59.00 $ 10.00 8 $ 72.00 $ 9.00 $ 70.00 $ 11.00 9 $ 81.00 $ 9.00 $ 82.00 $ 12.00 Now when Marginal Revenue equals to Marginal cost, Therefore firm will produce a level of output where Marginal revenue equals Marginal cost which is equal to $9. Hence option D is correct.

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Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: Quantity Total Revenue Total Cost $0 $10 1 $9 $14 $18 $19 $27 $25 4 $36 $32 $45 $40 6 $54 $49 7 $63 $59 8 $72 $70 9 $81 $82 Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to $6. $8. $7. $9. 2.

Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: Quantity Total Revenue Total Cost $0 $10 1 $9 $14 $18 $19 $27 $25 4 $36 $32 $45 $40 6 $54 $49 7 $63 $59 8 $72 $70 9 $81 $82 Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to $6. $8. $7. $9. 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem two Consider the total cost and total revenue given in the following table: Total Total Quantity cost Revenue 0 1 2 3 4 5 6 7 8 9 10 11 13 19 27 37 0 8 16 24 32 40 48 56 a) Calculate the profit for each quantity. How much should the firm produce to maximize profit? b) Calculate the marginal revenue and marginal cost for each quantity. Graph them. c) Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?
Assume a firm's marginal costs are increasing at its current level of output. If a firm's marginal revenue is less than the marginal cost of producing the last unit of output chosen by the firm, then: Profits can be increased if the firm decreases output. The firm is certainly earning an economic profit but not as much as it could be. Profits can be increased if the firm increases output. The firm's economic profit is necessarily less than zero.
2. Consider a competitive market where there are two types of firms, Type A and Type B, with total cost functions TC(q) = 2+4q+q² TCB (q) = 8+4q+6q² (a) Derive the short-run supply curve for each firm type (b) What is the short-run market supply, if there are 6 Type A firms, and 12 Type B firms? What is total quantity produced when p=10? (d) How does your answer at (c) change if we consider long run supply rather than short run? Here, assume again that p=10 and that there are 6 Type A firms and 12 Type B firms.
The equations below correspond with questions #1 - 2 below and describe the costs of a profit maximizing, perfectly competitive firm (q = output): Total Costs TC = 300 if q = 0 Total Costs TC = 400 + 10q + 2q2 if q > 0 Marginal Cost MC = 10 + 4q if q> 0 What is the greatest possible profit that this firm would earn if the market price is set at $90? a. $1800 b. $100 c. $400 d. $1400 e. none of the above
Lily's bakery operates in a perfectly competitive market where the prevailing price for a pumpkin (her only product) is $3. If Lily's marginal cost function is given by MC=0.1q: (i) Lily's profit-maximizing level of output is _______ (ii) Lily's variable profit is _______ (iii) The producer surplus is _______ If Lily also has a fixed cost of $50, then: (iv) her total profit is _______ Assuming Lily cannot avoid the fixed cost, should Lily continue to produce orshut down?
A competitive firm has a cost function C=2q³-12q²+20q+100. The optimal output at price of 92 is a. b. C. d. e. a. b. C. d. e. A competitive firm has a cost function C=2q³-12q2+20q+100. At price 92, the optimal profit is a. b. C. d. e. 10. 8. 6. A competitive firm has a cost function C=2q³-12q²+20q+100. At price 92, the optimal producer surplus is a. b. 4. None of the above. C. d. e. -220. 634. 529. 332. None of the above. -120. 734. 629. A competitive firm has a cost function C-2q³-12q²+20q+100. The firm's supply curve is given by 432. None of the above. P=2q³-12q²+20q+100 for q20. P=6q²-24q+20 for q20. P-6q²-24q+20 for q23. 2q³-12q²+20q+100 for q≥12. None of the above.
Problem #1: Assume that the following marginal costs exist in catfish production: 17 Quantity Produced (units per day) Marginal Cost (per unit) 10 11 12 13 14 15 16 $4 6 8 10 12 14 16 18 (a) Graph the MC curve. (b) Use the data on market demand below and graph the demand and MR curves on the same graph. Quantity demanded (units per day) 10 Price (per unit) 11 12 13 14 15 16 17 $25 24 23 22 21 20 19 18 (c) At what rate of output is MR = MC?
This is related to a competitive market player (company): Please refer to the figure above. The competitive market player will produce ____ units of output. A)0 B)45 C)90 D)100
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