Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph todetermine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferentbetween producing and shutting down, it will choose to produce. (Hint: Select purple points (diamond symbols] on the graph to receive exact averagevariable cost information.)Price(Dollars per overalls)12.5027.5045.00Quantity(Overallses)Total Revenue(Dollars)Fixed Cost Variable Cost(Dollars)(Dollars)135,000135,000135,000Profit(Dollars)If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's foxxed cost is $135,000 per day. In other words, if itshuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease).This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-is 5. Profit maximization and shutting down in the short runThe following graph plots daily cost curves for a firm operating in the competitive market for demin overalls.PRICE (Dollars per overalls)845403030% 8251510S10D2nMCATCAVC4GB 10 12 14QUANTITY (Thousands of overalises)161620

A competitive market is the market where consumer and producer has no power to influence the market…

Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points (diamond symbols] on the graph to receive exact average variable cost information.) Price (Dollars per overalls) 12.50 27.50 45.00 Quantity (Overallses) Total Revenue (Dollars) Fixed Cost (Dollars) 135,000 135,000 135,000. Variable Cost (Dollars) Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $135,000 per day. In other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-is

Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points (diamond symbols] on the graph to receive exact average variable cost information.) Price (Dollars per overalls) 12.50 27.50 45.00 Quantity (Overallses) Total Revenue (Dollars) Fixed Cost (Dollars) 135,000 135,000 135,000. Variable Cost (Dollars) Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $135,000 per day. In other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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20.
Problem 05-06 A firm's fixed costs for 0 units of output and its average total cost of producing different output levels are summarized in the table below. Complete the table to find the fixed cost, variable cost, total cost, average fixed cost, average variable cost, and marginal cost at all relevant levels of output. Instruction: Enter your responses for Average Fixed Cost (AFC) and Average Variable Cost (AVC) rounded to two decimal places. All other responses should be entered as whole numbers. If you are entering a negative number, use a negative sign (-) where appropriate. Q AVC ATC MC 150 300 75 200 H50 175 225 30 325 25 400 FC VC TC AFC 0 $ 15,000 0 100 15000 200 15000 300 15000 400 15000 500 15000 600 15000
Please answer each sub-question, and make sure your answer is correct!
1. If the Örmís production function isF(K;L) =K(L+ 2), derive the short-run total cost functionSTC(q;r;w;K). 2. The total cost of producing infant formula isCF= 30+qF. The total cost producing disposable diapers isCD= 30 + 0:5qD. The total cost of jointly producing them isCJ=70 +qF+ 0:25qD. Does this production process exhibit economies of scope?
A firm is producing and selling some output at an average variable cost of $8 per unit and bringing in a total revenue of $400. If the firm is currently indifferent between shutting down and continuing to operate in the short run and has a total cost of $1200. What would be the firms average fixed cost of producing 80 units?
Question 3. 5q? + 0.5g. What are the fixed cost (F), the variable cost function (VC), the marginal cost (MC), the average cost (AC), the average fixed cost (AFC) and the average variable cost (AVcy? Suppose a firm has a short-run cost function: C(g) = 1000 + 200g - %3D
Question 2: This question refers to a firm's production and profit maximization in the long-run. The firm's cost function is: TC = 20E + 100K. 2.a) In the graph below, plot the firm's isocost line representing total costs of $120,000. Indicate on the figure the value of the isocost's slope. Also indicate where the isocost line intersects with the horizontal and the vertical axes. K E 2.b) The firm is considering producing a total of 200 units. If the firm wants to minimize the cost of producing this level of output, what must the marginal rate of technical substitution be?
Suppose a firm’s short-run cost curves were found to be: Total Cost = SRTC = 1 + 2Q + Q2 Marginal Cost = SRMC = 2 + 2Q, Where Q is output. Assume the firm behaves as a price taker and sells its output at P = K8 per unit. (a) If the firm maximizes profits, how much will it produce? (b) What are the marginal, average and total cost at that point? (c) What is the firms’ profit?