What is the marginal revenue gained when one more unit of output is sold? Oa. The price at which the extra unit is sold but adds the rise in revenue of the previous units that could have been sold at a higher price O b. The price of the unit of output sold minus the production cost of that unit Oc. The price of the unit of output sold Od. The price at which the extra unit is sold but subtracts the drop in revenue of the previous units that could have been sold at a higher price

What is the marginal revenue gained when one more unit of output is sold? Oa. The price at which the extra unit is sold but adds the rise in revenue of the previous units that could have been sold at a higher price O b. The price of the unit of output sold minus the production cost of that unit Oc. The price of the unit of output sold Od. The price at which the extra unit is sold but subtracts the drop in revenue of the previous units that could have been sold at a higher price

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.1P

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is the measure of the way suppliers respond to a change in 2 points price. * O The marginal product of labor Ceteris Paribus Elasticity of supply The market supply curve A producer's profits are maximized when marginal cost .. 2 points Are equal to fixed costs minus variable costs OAre less than marginal revenue Result in decreasing marginal revenue OAre equal to marginal revenue or emplovee is
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can be a threat to the existing firm. Select one: O a. Close Substitutes O b. Customers rising demands O c. Availability of supplier O d. Economies of scale of existing firm
2. The demand curve facing a competitive firm The following graph shows the daily market for small cardboard boxes in Houston. 10 Demand Supply 7 1 2 3 4 5 6 7 10 QUANTITY (Millions of small boxes) Suppose that Vesoro is one of more than a hundred competitive firms in Houston that produce such cardboard boxes. Based on the preceding graph showing the daily market demand and supply curves, the price Vesoro must take as given is S PRICE (Dollars per small box) 2.
Ariana Grande has just finished recording her latestCD. Her record company’s marketing departmentdetermines that the demand for the CD is asfollows:Price Number of CDs$24 10,00022 20,00020 30,00018 40,00016 50,00014 60,000The company can produce the CD with no fixed costand a variable cost of $5 per CD.a. Find total revenue for quantity equal to 10,000,20,000, and so on. What is the marginal revenuefor each 10,000 increase in the quantity sold?
2. Firm A makes and sells motor cycles. The total cost of each cycle is the sum of the costs of frames, assembly and engine. The firm produces its own engines according to the cost equation C₁=250,000 + 1,000Q +5Q² The cost of frames and assembly is $2,000 per cycle. Monthly demand for cycles is given by the inverse demand equation: P = 10,000-30Q Calculate the MC of producing an additional engine.
QUESTION 17 The table provided below represents the market demand for pens. There are no fixed costs associated with procurement of pens and the marginal cost of each pan is $2.50. 0 0 0 Calculate the total revenue for a price of $4.00 O a. $17.50 Ob $28.00 O $2.50 Od $10.00
Vintage Camera T Temple MIS G is You have the following data for product X: sales revenue $14,000, allocated fixed costs $12,000, variable costs $20,000. You cannot increase the price of product X or improve the production process to increase profitability. What should you do about product X? O do nothing - unprofitable products are just one of the costs of doing business O keep the product both in the short term and in the long term O keep the product in the short term and drop it in the long term O drop the product both in the short term and in the long term O drop the product in the short term and keep it in the long term
The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 10 V ATC The firm will receive $ MR Quantity/time The firm will maximize its profit at a quantity of▼ units. D Options: 6, 8, 9, or 10 After choosing the profit maximizing quantity, the firm will charge a price of in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is How will the situation change over time? Options: 6,8 10, or 24 per unit for this output. O Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. O The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. O This market is already in long-run equilibrium, and will not change throughout time. O Losses will induce firms to leave…
3. Answer the following questions about the figure below: eliqu Price $20 $18 $16 $14 $12 $10 $8. $6 $4 $2 0 MR D 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Quantity MC a. What is the profit-maximizing level of output? iliw tailogonom off 010 +115d0-(899 moitiba T wilmM) loods.P b. What price with the monopolist charge to maximize profits?
. A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity. a. True O b. False