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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Figure A Competitive Firm1.2 MC %24 ATC Given Pl =$5.00 P2 =S6.00 P3 =S7.00 QI = 100.00 AVC P3 P2 P1 MR Quantity Q1 Refer to "Figure A Competitive Firm1.2", this typical firm earns a profit (or loss) in the amount of about minus $220.00 Ominus $200,00 minus $210.00 O minus $230.00
Suppose that QRZ Co. produces desks. A regulation stipulates that they may charge at maximum 10% more than their average costs. Suppose also that the materials to produce 1 unit of output costs $175.00 and that the per-unit labor costs are $120.00. What is the maximum price that QRZ Co. may charge for desks? A ▶
Happyland is one of five amusement parks on Sunshine Island. The following graph shows Happyland's kinked demand curve (D₁ - D₂) and the resulting marginal revenue curve (MR₁ - MR₂). The graph also shows two possible marginal cost curves (MC₁ and MC₂). PRICE (Dollars per ticket) 24 22 20 18 16 14 12 10 8 6 4 2 0 0 MR₁ + + 1 2 D₁ + 3 5 7 8 9 QUANTITY (Millions of tickets per year) MR₂ 4 6 10 MC₁ MC₂ D₂ 1 11 12 (?) Assume Happyland's marginal cost is represented by MC2. Happyland will set a price of per ticket. its price, other firms will not follow suit, but if one firm its price, According to the kinked demand curve model, if one firm other firms will do likewise to retain their market share. Therefore, if one of Happyland's competitors decreases its price to below the price you just found for Happyland, Happyland will The basic principle behind the kinked demand curve model explains why the D₁ portion of the kinked demand curve is relatively D₂ portion. If Happyland's marginal cost…
35 30 25 265 20 20 16 15 12 10 5 O 720 O 900 O 960 I O 600 I 10 20 30 45 50 60 70 80 90 100 110 Q Consider the above diagram as the cost and revenue structure of perfect competition (P = MR) If the price is $15 (P2), what is the total cost associated with the profit maximizing (or loss minimizing) quantity? P₁ AVC P₂ P3 5
At which point is allocative efficiency attained?
P 14 13 12 11 10 9 8 7 6 5 QD 50 100 150 200 250 300 350 400 450 500 Consider a market with the above demand and two firms. Both firms have a constant marginal cost of 7. 1. What price should these firms charge to maximize total industry profit? ..............(Note: the marginal condition we learned will work here but you need to be careful because the changes in quantity on the schedule are not 1. Because of this, you might want to use a brute force approach here. It's worth thinking about how you would reconcile it with the marginal condition though. Also, the marginal condition doesn't match exactly so take the best number from the schedule.) 2. Assuming that if they set the same price, they split the market evenly, what will the profit of each firm be if they both set the above price?........... 3. Now imagine that the…
$ 44 40 36 32 28 24 20 16 12 8 4 0 Monopoly Firm (b) B O (c) C O (d) D A E C MR MC 0 4 8 12 16 20 04. At which point is the firm's economic profit equal to zero? O(a) A B D ATC AVC D 4 24 28 Q Click Save and Submit to save and submit. Click Save All Answers to save all answers. Q Search
part D E F G
Given the level of demand below, what is the marginal revenue of the fifth unit of production? PriceQuantity 25 1 22 18 2 3 15 12 4
Please continue to solve from part d to part e. Thank you so much.
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.
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

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