Which of the following are true about theprofit-maximizing rule of MR = MC? (checkall that apply)A) The rule applies only if producing ispreferable to shutting down.(B) In some cases, MR will equal MC at afractional level of output and therefore thelast complete unit of output should beproduced where MR < MC.(C) The rule can be restated as P = MC whenapplied to a purely competitive firm becauseproduct price and MR are equal.(D) The rule is an accurate guide to profitmaximization for all firms regardless of theirmarket structure.

The market structure can be divided into four based on the degree of competition and the type of…

Answered: Which of the following are true about…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. ThedemandfunctionforagoodisgivenbytheequationP=a−bQwhilethetotalcost function is TC = dQ2 + eQ + f, where a, b, d, e and f are positive constants. (a) Derive the equation for profit.(b) Derive an expression for the value of Q for which profit is maximised.
Problem 1. During your first month as an employee at Greenfield Industries (a large drill-bitmanufacturer), you are asked to evaluate alternatives for producing a newly designed drill bit on aturning machine. Your boss’ memorandum to you has practically no information about what thealternatives are and what criteria should be used. The same task was posed to a previous employeewho could not finish the analysis, but she has given you the following information: An old turningmachine valued at $350,000 exists (in the warehouse) that can be modified for the new drill bit.The in-house technicians have given an estimate of $40,000 to modify this machine, and they assureyou that they will have the machine ready before the projected start date (although they havenever done any modifications of this type). It is hoped that the old turning machine will be able tomeet production requirements at full capacity. An outside company, McDonald Inc., made themachine seven years ago and can easily do the…
Question Two: The following data for a small farm operating in a perfectly competitive market are given in the table below. The price is $10 per yogurt. Q TC 100 10 200 20 280 30 330 40 360 50 380 60 390 70 425 80 500 90 610 100 750 Instructions: 1. What is the firm's decision at that price? (whether to produce or to shutdown), justify your answer. 2. Show the range of output at which the firm experience IMR and DMR. 3. Using excel, now suppose the price of strawberry yoghurt decreases to $5.5 per unit, what is the right decision firm should take, (produce or shutdown) justify your answer.
A toy manufacturer makes miniature trucks. The pricep(in dollar) and the demandx(numberof miniature trucks) are related by the equation 6000−600p=x. The total cost for the sametoy manufacturer to producexminiature trucks can be modeled byC(x) = 8x+ 450.(a) (10 points) Express the pricepin terms of the demandx. Find the revenueR(x) if themanufacturer sellsxminiature trucks in a month and find the domain of this function.(b) (10 points) Graph the cost and revenue functions on the same coordinate system for 0≤x≤6000.(c) (10 points) What is the minimum number of trucks the toy manufacturer must sell tobreak even?(d) (10 points) FindP′(300) and interpret the result.(e) (10 points) What is the exact profit from the sale of the 301stminiature truck?
TB, TC TC A TB 4. 3- E 1- Reference: TB and TC Curves The maximum NB is can be seen by the distance between OAG and C O B. E and B OCFand E O D. A and G O E. None of the above
4.
Answer all parts (a)-(g) of this question.Mette has started Mersea Oysters. She aims to export oysters to Germany where she acts as aprice taker. After a couple of nights of calculations she believes that her cost function is givenby C(q) = 100 + 6q + 2q2, where q denotes kilos of oysters harvested. The market price shewill face in Germany is 50 per kilo.(a) [4 marks] Derive Mette’s marginal cost function.(b) [7 marks] Use your result from (a) to determine the profit-maximizing output level.(c) [7 marks] Explain in words why the supply function for a price taker is the same as themarginal cost function.(d) [8 marks] Calculate Mette’s profit. Illustrate marginal cost and profit in a diagram.(e) [8 marks] Now instead assume that the price is 22. Should Mette produce at this price?(f) [8 marks] Assume again that the price is 22 but that the fixed cost of producing (100) issunk and was taken in the previous period. Should Mette produce at this price in this case?(g) [8 marks] Assume again…
Answer all parts (a)-(g) of this question.Mette has started Mersea Oysters. She aims to export oysters to Germany where she acts as aprice taker. After a couple of nights of calculations she believes that her cost function is givenby C(q) = 100 + 6q + 2q2, where q denotes kilos of oysters harvested. The market price shewill face in Germany is 50 per kilo.(a) [4 marks] Derive Mette’s marginal cost function.(b) [7 marks] Use your result from (a) to determine the profit-maximizing output level.(c) [7 marks] Explain in words why the supply function for a price taker is the same as themarginal cost function.(d) [8 marks] Calculate Mette’s profit. Illustrate marginal cost and profit in a diagram.(e) [8 marks] Now instead assume that the price is 22. Should Mette produce at this price?(f) [8 marks] Assume again that the price is 22 but that the fixed cost of producing (100) issunk and was taken in the previous period. Should Mette produce at this price in this case?(g) [8 marks] Assume again…
AT the profit maximizing level of input use, which of the follow ng are true a. MVP =0 O MVP = MIC C. MPP = MVP d MVP-MVIC
Completed 58 out of 60 uestion 31 of 60 If output falls below equilibrium, marginal cost will be higher than the price. O True O False LEGO
Ain a community of 10000 people, each is willing to pay Ksh 10 for each well dug. The cost of digging the wall is is given by C= Q2+20Q. Calculate the pareto efficiecy number of wells to be dug. If the government want to dug the well at a minimal cost, how many walls will it dig and how much will it spen if the projet is given to a private, profit making organization, how many well would the firm dig?

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