the firm is regulated using the cost-plus, or fair-return priceMRmethod and that regulators can accurately estimate the firm'scosts of production.$6.2When the firm's average cost function is represented by the5.5curve AC 1, what is the firm's economic profit?AC23.7economic profit: $ACI2.6After the firm discovers the above mentioned cost savings14and is now represented by AC 2, what is the firm'sМСeconomic profit?3.8 4.57.48.69Quantityeconomic profit: $Given the profit identified with each cost structure, the firmOhas incentive to keep cost higherhas no incentive to either minimize costs or keepcosts high.has incentive to identify cost saving measures thatdrive down costs

Economic profit is the difference between the revenue received from the sale and the cost of the…

Answered: the firm is regulated using the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A drug company produces a new drug to treat baldness. The inverse demand curve for the drug is P = 205 - 200, where Q measures the number of pills in millions. The various costs of production are given by TC = 100 +5Q, ATC = 5 + 100/Q, and MC = 5. If the government grants this firm a patent, it will earn profits of ___________. If the government revokes the patent, and the firm must sell its drug at marginal cost because of competition, it will earn profits or losses of $600 million; $500,000 $70 million; -$25 million $2 billion; $0 $400 million; -$100 million
Table 8.1 Q 0 1 2 3456 3 4 6 7 8 9 10 MC $30 20 30 40 50 60 70 80 90 100 ATC $230 125.00 93.33 80.00 74.00 71.67 71.43 72.50 74.44 77.00 AVC Produce an output of 5 and earn a negative economic profit Shutdown and produce nothing Produce an output of 5 and earn a positive economic profit Produce an output of 6 and earn a positive economic profit -11 $130 75.00 60.00 55.00 54.00 55.00 57.14 60.00 63.33 67.00 Refer to table 8.1. If the competitive market price for kale is $51, what will the firm do in the short-run?
7. A car manufacturer builds both left-hand and right-hand drive cars. It estimates that its costs and the demand faced in each of these respective markets can be modelled by the functions below Р 3D 520 — 30, P, = 720 – 4Q2 100Q1 + 120Q2 + 4Q1Q2 - - TC =
The selling price of product C is K20 while the variable cost is K15 per unit. Fixed cost are K20, 000. A. What is the break even quantity? B. The firm can earn K3 per unit in the next best alternative. How much shou firm produce to earn a normal profit C. What is the degree of operating leverage at the output level of 10,000 [16
Qno3 AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd = 250 – 50 P where P is Price and Q are packs of vaccines in ‘000 Total Cost Function estimated by the firm is TC = 15 + 0.5Q where Q is monthly output. Required. a). What is the market structure of AVAC? State its characteristics. b). To maximize profit, i) What will be the optimum price and how many packs of Vaccine should the firm produce and sell per month? ii). If this number of packs is produced and sold, what will be the firm’s monthly profit? c). Using available information, draw AVAC’s demand, marginal revenue and marginal cost curves in a graph and clearly label thefirm’s profit maximizing price, quantity and profit. Do you observe any welfare loss? If so, also indicate and label the area on the graph.? d). Assume all other pharmaceutical firms in the market start producing the Vaccine and the market becomes competitive. What will…
Use for questions 4 -6: The Coolidge Corporation is the only producer of a particular type of laser (i.e., a monopoly market). The demand and marginal for its product are revenue curves QD 8,300-2.1P P 3952.381 -0.4762QD MR 3952.381 -0.9524 Qp Demand curve Inverse Demand or Price Curve Marginal Revenue Curve and its total cost function is TC 2,200 480Q+20g2 MC 48040Q where P is price (in dollars), TC is total cost (in dollars), and Q is monthly output.If this number were produced and sold, what would be the firm's monthly profit? а. II $144,992.29 b. II $31,950 C. IT $145,012.74 = d. П - $0
A firm has a division that produces X, whose total costs are TC = 10 + Q² (where Q is the quantity of X). The marketing division adds its own total costs of 5 + 3Q. In the competitiv external market for X, the wholesale price is $10. The transfer price of X should be: $10.00 $12.00 $2.00 $5.00 O $15.00
Dollars A B C 0 KDE Quantity A) K units at price C B) E units at price B H C) E units at price A F D) D units at price J Refer to the above diagram. To maximize profit or minimize losses this firm will produce: MC ATC AVC -MR
Comatically save as you proceed through the test. Question 16 Please refer to the graph. In order to maximize profit this firm would charge what price? PAD MC B C E P2 A P₁ MR D 0 Q₁ Q₂ Q3 Quantity Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a P4 C P3 P2 d P1 ✓ Saved Search 7& * 4+ 144 σ с f10 114 Po f11 144 口 f12 ins prt sc delete ho = ← backspace
Demonstrate that a firm maximises profit at the point where marginal revenue is equal to marginal cost, ie MR=MC. Motivate your answer in terms of the diagram below. Diagram attached.
===> Please give me proper explanation otherwise i give downwote Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

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