The table below shows the total costs faced by Faizah's Manufacturing Firm for different quantities of Good G sold. Quantity Total Cost 0 $64 1 $79 $98 $120 $145 $171 $198 $228 $262 $305 $353 2 3 4 5 6 7 8 9 10 Faizah's Manufacturing Firm sells Good G in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $32 per unit. (a) Calculate the average fixed cost of producing 8 units. Show your work. (b) Identify the profit-maximizing quantity. Explain using marginal analysis. (c) Calculate the economic profit at the profit-maximizing quantity you identified in part (b). Show your work.

The table below shows the total costs faced by Faizah's Manufacturing Firm for different quantities of Good G sold. Quantity Total Cost 0 $64 1 $79 $98 $120 $145 $171 $198 $228 $262 $305 $353 2 3 4 5 6 7 8 9 10 Faizah's Manufacturing Firm sells Good G in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $32 per unit. (a) Calculate the average fixed cost of producing 8 units. Show your work. (b) Identify the profit-maximizing quantity. Explain using marginal analysis. (c) Calculate the economic profit at the profit-maximizing quantity you identified in part (b). Show your work.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 3E

See similar textbooks

Related questions

Q: 1) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its…

A: Since you posted multiple questions, we will provide the answer for first one questions.

Q: Assume agricultural products are identical and there are many sellers and buyers of agriculture…

A: It is given that, the agricultural products are identical and there are many buyers and sellers of…

Q: Market Representative Firm MC A a MR = P $3.50 - ATC $2.50 - AVC 50,000 350 400 Quantity (Q) Output…

A: At equilibrium, demand is equal to supply. So the equilibrium price is $ 3.50. At profit…

Q: At its current level of production, a profit-maximizing firm in a competitive market receives $12.50…

A: A competitive market, often referred to as a perfectly competitive market, is a type of market…

Q: Chapter 14 a. can be represented by the area P3 x Q3. b. can be represented by the area P3 x Q2. c.…

A: And for a price taker firm the profit maximizing condition is : P = MC Total revenue by selling Q…

Q: There are 240 firms of type A and 180 firms of type B in a perfectly competitive market. On one…

A: Equilibrium in the competitive market is reached where quantity demanded is equal to quantity…

Q: Will, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive.…

A: The short-run supply(ss) curve of the industry is a summation of quantity supplied by every producer…

Q: Since you must reduce the price to increase sales, the marginal revenue curve of an imperfectly…

A: An imperfectly competitive firm has to lower its prices inorder to sell more units of output. So,…

Q: The demand curve and supply curve for carpet cleaning in the local market are currently as follows:…

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…

Q: A perfectly competitive hardware manufacturer has a total revenue of $85 million, total variable…

A: The producer surplus of a perfectly competitive hardware manufacturer can be calculated by…

Q: A profit-maximizing firm in a competitive market is currently producing and selling 1000 units of…

A: In a competitive market, A firm will produce where P = MC. In long run the profit is zero. There…

Q: Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette…

A: Perfect competition is a concept in economics that represents an idealized market structure in which…

Q: Questions 3~5 are a set of questions. Here is the table for the questions. Output Total Cost 0 $0 1…

A: Businesses in a market with competition have the freedom to enter and exit at any time. This implies…

Q: cost function of TC =100q(b)+1000. Show your steps. 1. Calculate the quantity of backpacks produced…

A: The term market price refers to the amount of money for what an asset can be sold in a market. here…

Q: Using the above graph, The minimum level of output this firm would produce is 12 units. The…

A: "Since you have posted a question with multiple subparts.We will solve first three subparts for…

Q: For a profit-maximizing, perfectly competitive firm with marginal cost function MC(q) = q² + 3, find…

A: The firm is perfectly competitive. The marginal cost function is given as, MC (q) = q2 + 3

Q: Will, Jill, and Phil are all wheat farmers. The wheat industry is perfectly (purely) competitive.…

A: ATC stands for average total cost, which is sometimes known as average cost or unit cost. Average…

Q: Here is information pertaining to a firm operating in a perfectly competitive marke Price $10.00…

A: A perfectly competitive firm produces output where P= MC

Q: Goods sold in a perfectly competitive market are quite differentiated. True/False

A: Before proceeding to the explanation part, we must first know which are the 4 main types of market…

Q: $2,140 Evan's Hat Store sells hats in a perfectly competitive market with a downward sloping demand…

Q: What is the profit maximizing level of output for the firm? How much profit is this firm earning?…

A: Profit maximizing level of output is achieved where price and quantity are equal i.e., in…

Q: Glowglobes are produced by identical firms in a perfectly competitive market. There are 22 firms in…

A: Total firms in the market=22 Each firm's total cost function is TC=473+2q+q2 and marginal cost…

Q: The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a…

A: The marginal-cost is the cost incurred on the production of an additional-unit of output. And the…

Q: Paulina sells beef in a competitive market where the price is $8 per pound. Her total revenue and…

A: A perfectly competitive firm produces its output where Price is equal to Marginal Cost. => P = MC…

Q: The marginal cost to produce one bottle of developer is $5. There is no fixed cost. Note that this…

A: The cost of a firm are of two types- fixed cost and variable cost. The fixed cost refers to the cost…

Q: Suppose that firm Alphabet is the only company that sells all-inclusive vacation packages in the UK.…

A: Price discrimination refers to the selling strategy which can charge different prices from different…

Q: In the US cotton market, each farm having the cost function c(q)=0.5q^(2)+ 10 q+162 where q is the…

A: The price at which a specific good or service is purchased and sold in a competitive market where…

Question

The table below shows the total costs faced by Faizah's Manufacturing Firm for different quantities of Good G sold.
Quantity
0
1
2
3
4
5
6
7
8
9
10
Total Cost
$64
$79
$98
$120
$145
$171
$198
$228
$262
$305
$353
Faizah's Manufacturing Firm sells Good G in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply
curve. The market price is $32 per unit.
(a) Calculate the average fixed cost of producing 8 units. Show your work.
(b) Identify the profit-maximizing quantity. Explain using marginal analysis.
(c) Calculate the economic profit at the profit-maximizing quantity you identified in part (b). Show your work.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Intro

Step 2: Part a

Step 3: Part b

Step 4: cont.

Step 5: Part c

Solution

Trending now

This is a popular solution!

Step by step

Solved in 6 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

other three parts

(d) Based on your answer to part (c), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain.
(e) Based on your answer to part (c), will the market price increase, decrease, or stay the same in the long run? Explain.
(f) The income elasticity of demand for Good G is -3, and the cross-price elasticity of demand for gizmos with respect to the price of Good G is 0.1.
Based on your answer to part (e), what will happen to the demand for gizmos? Explain.
(g) Now assume that the market in which Faizah's Manufacturing Firm operates is in long-run equilibrium at a price of $35 per unit.
(i) Suppose the government imposes a price floor at $30 per unit on the market for Good G. Will consumer surplus in the market for Good G
increase, decrease, or stay the same in the short run as a result of the price floor? Explain.
(ii) Suppose instead the cost of energy, a variable cost for Faizah's Manufacturing Firm, decreases. Will the profit-maximizing quantity of Good G for
Faizah's Manufacturing Firm increase, decrease, or stay the same in the short run? Explain.

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A publisher faces the following demand schedule for the next novel from one of its popular authors:PriceQuantity Demanded$1000 novels90100,00080200,00070300,00060400,00050500,00040600,00030700,00020800,00010900,00001,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $10 per book.a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profit-maximizing publisher choose? What price would it charge?b. Compute marginal revenue. (Recall that MR = ΔTR/ΔQ.) How does marginal revenue compare to the price? Explain.c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do the marginal-revenue and marginal-cost curves cross? What does this signify?d. In your graph, shade in the deadweight loss. Explain in words what this means.e. If the author were paid $3 million instead of $2 million to write the book, how would this affect the publisher's decision regarding what price to…
The market for smoothies is perfectly competitive and the market demand schedule is in the first two columns in the below table. Each of the 100 producers of smoothies has the costs given in columns 3- 6 when it uses its least-cost plant. What is the market price of a smoothie? $5.25 $4.25 $2.91 $2.20 Market demand schedule Quantity demanded (smoothies per hour) 1,000 Price (dollars per smoothie) 1.90 2.00 2.20 2.91 4.25 5.25 5.50 950 800 700 550 400 300 Output (smoothies per hour) 3 4 5 6 7 8 9 Producers of smoothies Costs Marginal cost (dollars per additional smoothie) 2.50 2.20 1.90 2.00 2.91 4.25 8.00 Average variable cost (dollars per smoothie) 4.00 3.53 3.24 3.00 2.91 3.00 Average total cost 3.33 7.33 6.03 5.24 4.67 4.34 4.25 4.44
M10
The table below shows the total variable costs faced by Arlo's Eye Care for different quantities of reading glasses sold. QUANTITY TOTAL VARIABLE COST 1 $20 2 $25 3 $35 4 $50 5 $70 6 $95 7 $125 8 $160 9 $200 10 $245 Arlo's Eye Care sells reading glasses in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $33 per unit, and the total fixed cost is $30. a. Identify the profit-maximizing quantity. Explain using marginal analysis. b. Calculate the economic profit at the profit-maximizing quantity you identified in part. Show your work. c. Based on your answer to part (b), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain. d. The income elasticity of demand for reading glasses is 1.4, and the cross-price elasticity of demand for sunglasses with respect to the price of reading glasses is -0.75.…
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 20 1.00 25 2.00 1.20 30 2.46 1.41 35 3.51 1.71 40 4.11 2.01 45 5.43 2.39 50 5.99 2.75 55 8.47 3.27
Based on Zangwill (1992). Murray Manufacturing runs a day shift and a night shift. Regardless of the number of units produced, the only production cost during a shift is a setup cost. It costs $8000 to run the day shift and $4500 to run the night shift. Demand for the next two days is as follows: day 1, 2000; night 1, 3000; day 2, 2000; night 2, 3000. It costs $1 per unit to hold a unit in inventory for a shift. a. Determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. (Note: Not all shifts have to be run.) b. After listening to a seminar on the virtues of the Japanese theory of production, Murray has cut the setup cost of its day shift to $1000 per shift and the setup cost of its night shift to $3500 per shift. Now determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. Show that the decrease in setup costs has actually raised the average inventory level. Is this…
Suppose that each firm in a competitive industry has the following costs: Totalcost:TC=50+1/2q2 Marginalcost:MC=q where q is an individual firm's quantity produced. The market demand curve for this product is Demand:QD=120−P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market.1. Give the equation for the market supply curve for the short run in which the number of firms is fixed.2. What is the equilibrium price and quantity for this market in the short run?3. In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is there incentive for firms to enter or exit?4. In the long run with free entry and exit, what is the equilibrium price and quantity in this market?5. In this long-run equilibrium, how much does each firm produce? How many firms are in themarket?
Handwritten
The short-run market demand and supply for Kente cloth are expressed as follows: Demand:P=40-0.25Q Supply: P=5+0.05Q Marginal cost: -20+4Q Find short run level of output.
Please answer questions D, E and F
Suppose that YouYeet is one of over a dozen competitive firms in the Oviedo area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price YouYeet must take as given is . Fill in the price and the total, marginal, and average revenue YouYeet earns when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Trucks) (Dollars per truck) (Dollars) (Dollars) (Dollars per truck) 0 0 – 1 2 3 The demand curve faced by YouYeet is identical to which of its other curves? Check all that apply. Supply curve Marginal revenue curve Average revenue curve Marginal cost curve
The graph below depicts the cost structure for a firm in a competitive market. Use the graph to answer the following questions. Figure 14-2 Price P₂ P₁ Q₁Q₂ MC AVC ATC Quantity Refer to Figure 14-2. When price falls from P3 to P₁, the firm finds that fixed cost is higher at a production level of Q₁ than it is at Q3. it should produce Q₁ units of output. it should produce Q3 units of output. it is unwilling to produce any output.