Use the data in the table below Q P MR 0 220 1 210 210 420 2 200 190 210 3 190 170 140 4 180 150 105 5 170 130 84 6 160 110 70 7 150 90 60 8 140 70 52.5 9 130 50 46.7 93.3 10 120 30 42 99 11 110 10 38.2 105 12 100 -10 35 111.3 s you can see, fixed costs for this operation are 420. d) it is earning above normal profits e) insufficient data to answer this question Q 0 1 2 3 4 5 6 7 8 9 10 11 12 P 220 210 200 190 180 170 160 150 140 130 120 110 100 MR AFC 210 190 170 150 130 110 ssuming that this firm is a short run profit maximizer, what statement best describes its present situation? a) it should shut down immediately b) it is incurring a loss but should continue operating in the short run c) it is earning only a normal profit 90 70 50 30 10 -10 AVC Suppose that the firm in problem 7 can purchase a new productive technology that costs an dditional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost production in half at everyy production level. Assume that the new technology is purchased -- fill in e blanks for this changed chart below. 150 135 123.3 112.5 103 95.8 AFC 92.1 91.3 ATC 570 345 263.3 217.5 187 165.8 152.1 143.8 140 141 143.2 146.3 AVC MC 150 120 100 80 65 60 70 85 110 150 165 180 ATC MC or the table you've just completed what are the firm's production, pricing and profit levels?
Use the data in the table below Q P MR 0 220 1 210 210 420 2 200 190 210 3 190 170 140 4 180 150 105 5 170 130 84 6 160 110 70 7 150 90 60 8 140 70 52.5 9 130 50 46.7 93.3 10 120 30 42 99 11 110 10 38.2 105 12 100 -10 35 111.3 s you can see, fixed costs for this operation are 420. d) it is earning above normal profits e) insufficient data to answer this question Q 0 1 2 3 4 5 6 7 8 9 10 11 12 P 220 210 200 190 180 170 160 150 140 130 120 110 100 MR AFC 210 190 170 150 130 110 ssuming that this firm is a short run profit maximizer, what statement best describes its present situation? a) it should shut down immediately b) it is incurring a loss but should continue operating in the short run c) it is earning only a normal profit 90 70 50 30 10 -10 AVC Suppose that the firm in problem 7 can purchase a new productive technology that costs an dditional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost production in half at everyy production level. Assume that the new technology is purchased -- fill in e blanks for this changed chart below. 150 135 123.3 112.5 103 95.8 AFC 92.1 91.3 ATC 570 345 263.3 217.5 187 165.8 152.1 143.8 140 141 143.2 146.3 AVC MC 150 120 100 80 65 60 70 85 110 150 165 180 ATC MC or the table you've just completed what are the firm's production, pricing and profit levels?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please provide answer with explanation
Transcribed Image Text:7.
Use the data in the table below
Q
P
MR
0
220
1
210
2
200
3
190
4
180
170
160
150
140
130
120
110
100
420
150
210
135
140
123.3
105
112.5
84
103
70
95.8
60
92.1
52.5
91.3
50
46.7
93.3
30
42
99
10
38.2
105
-10
35
111.3
As you can see, fixed costs for this operation are 420.
5
6
7
8
9
10
11
12
8.
210
190
170
150
130
110
90
70
Q
0
1
2
3
4
5
6
7
8
9
10
11
12
P
220
210
200
190
180
170
160
150
140
130
120
110
100
AFC
Assuming that this firm is a short run profit maximizer, what statement best describes its present situation?
a) it should shut down immediately
b) it is incurring a loss but should continue operating in the short run
c) it is earning only a normal profit
d) it is earning above normal profits
e) insufficient data to answer this question
MR
Suppose that the firm in problem 7 can purchase a new productive technology that costs an
additional 180, bringing the fixed costs of operation to 600. This new technology cuts the marginal cost
of production in half at everyy production level. Assume that the new technology is purchased -- fill in
the blanks for this changed chart below.
210
190
170
150
130
110
AVC
90
70
50
30
10
-10
AFC
ATC
570
345
263.3
217.5
187
165.8
152.1
143.8
140
141
143.2
146.3
AVC
MC
150
120
100
80
65
60
70
85
110
150
165
180
ATC
MC
For the table you've just completed what are the firm's production, pricing and profit levels?
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