Table: Total Cost for a Perfectly Competitive FirmQuantity346.10Total Cost ($) 101620 2224252730343945In short run, this firm will produce and suffer loss if the price is:(Tip: Find ATC and AVC first)O $4.25O$2.5O $5O $3911.

The total cost incurred by a firm operating in a market includes fixed costs and variable costs. The…

Answered: Table: Total Cost for a Perfectly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The table below describes a firm that sells output in a perfectly competitive market. Note the second column describes total costs. O $8 O $12 O $6 Output O $4 0 1 2 3 4 5 Which of the following market prices would cause the firm's profit-maximizing output level to be equal to 5? 6 Total Cost (in dollars) $3 $9 $14 $18 $23 $30 $40 4
1. Explain the relationship between price, marginal revenue and average revenue for a perfectly competitive firm? 2. When does a perfectly competitive firm maximize their profits? What they should do if at their current production level their marginal revenue is greater than marginal cost? 3. Explain the difference between a shut-down decision and exiting decision for a competitive firm? When and how they make such decision? 4. Refer to the graph below: Price 19 18 MC 16 12 ATC 1 2 3 43 6 1 8 Quantity In the above graph, assume that the price per unit is $10. Based on this information calculate: a. Profit maximization quantity b. Total revenue at that level c. Total cost at that level d. Profit or loss for this firm (if any) Please refer to the discussion board requirement announcement before posting. First post due on Thursday, May 6th, and reply to two other student's posts due on Sunday, May 9th.
5,000 Total Cost 10,000 O a.) The profit is maximized. Profit Total Revenue b.) The firm should increase output 15,000 Based on this graph, which of the following statements is true at an output of 7,000 indicated by the green line? Output Oc.) The slopes of the total revenue and total cost curves are equal. O d.) The cost is rising faster than the revenue.
Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. (? 100 06 80 70 60 ATC 50 40 30 AVC 20 + MC O 10 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of shirts) For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Produce or Shut Down? Profit or Loss? 15 20 25 55 70 85 COSTS (Dollars)
Price $70 5.50 530 $10 Demand 10 20 30 40 50 60 70 Quantity If this firm were to sell 20 units of output, its marginal revenue would be O $40 O $600 O $30. O $1,000
Refer to Figure 14-1. If the market price is $13, the firm will earn O a. positive economic profits in the short run. Ⓒb. zero economic profits in the short run. O c. negative economic profits in the short run but remain in business. O d. negative economic profits and shut down. Icon Key Figure 14-1 Suppose that a firm in a competitive market has the following cost curves: PRICE 20 18 16 14 13 12 10 6 2 MC 1 2 3 QUANTITY 4 ATC AVC 5
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QUESTION 24 The total revenue of a purely competitive firm from selling 6 units of output is $48. Based on this information, the unit price of the output must be O $54. O $8. O $42. O $288.
Quantity Price Total Fixed Costs Variale Cost Total Costs Average Variable Costs Average Total Cost Marginal Cost Total Revenue Marginal Revenue 0 35 25 0 1 35 25 20 2 35 25 25 3 35 25 35 4 35 25 52 5 35 25 80 If this firm produces a quantity of zero units, what is the total profits? What is the firm's marginal cost at a production level of two units? What is the average variable cost at a production level of five units? This firm becomes profitable producing at a quantity of ___ units. The average total cost is smallest at which level of production? At what quantity should this firm produce to maximize their profits based on your calculations? The total costs to produce four units is __________ while the average total cost to produce four units is _________.
A perfectly competitive firm that makes car batteries has total fixed costs of $10,000 per month. The market price at which it can sell its output is $100 per battery. The firm's minimum AVC Is $105 per battery. The firm is currently producing 500 batteries a month (the output level at which MR=MC). This firm is making a O loss, shut down O profit, shut down O profit: increase O loss; increase and should. production
5
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)

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Table: Total Cost for a Perfectly Competitive Firm Quantity 3 4 17 8. 10 Total Cost ($) 10 16 20 22 30 34 39 45 In short run, this firm will produce and suffer loss if the price is: (Tip: Find ATC and AVC first) O $4.25 O$2.5 O $5 O$3 9, 27 25 24 2) 1.