Total Cost Variable Cost Quantity (dollars) (dollars) $800 $0 100 1,260 200 1,660 300 2,560 400 3,560 500 4,400 Table 12-1 shows the short-run cost data of a perfectly competitive fırm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Refer to Table 12-1. If the market price of each camera case is $9 and the firm maximizes profit, What will happen in this market in the long run? Production will decrease because of the war in Ukraine

Total Cost Variable Cost Quantity (dollars) (dollars) $800 $0 100 1,260 200 1,660 300 2,560 400 3,560 500 4,400 Table 12-1 shows the short-run cost data of a perfectly competitive fırm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Refer to Table 12-1. If the market price of each camera case is $9 and the firm maximizes profit, What will happen in this market in the long run? Production will decrease because of the war in Ukraine

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that a paper mill "feeds" a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $30, the second by $ 27, the third by $24, and so on, until the tenth unit increases profit by just $3. The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $9.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and…
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