Q: Complete the following table. Note that the firm in question is profit-maximizing in a competitive…
A: A firm in a perfectly competitive market maximizes profit by producing at MC = P Here MC = Marginal…
Q: Price and cost (dollars) 70 60 50 40 30 20 10 0 MC₁ 50 Quantity MC₂ 100 Demand 150 The demand for…
A: The marginal cost is the change in the total cost that arises when the quantity produced is…
Q: 3. Assume a firm is facing the market demand curve: q = 100-2p, its total cost function is: c(q) =…
A: Here, market demand curve and total cost function of a firm is given.
Q: Uncle Tyler's farm has costs and revenue as seen in the graph. What is Uncle Tyler's…
A: Profit maximizing Level: A firm's profit-maximizing level is at the point where the MC equals the…
Q: Suppose that the fish processor could use a different production method that involves recycling…
A: The economic profit for recycling and non-recycling for the fish processor and the water park is…
Q: The author is paid $800,000 to write the novel, and the marginal cost of publishing the novel is a…
A: please find the answer below.
Q: OSee Hint The total cost of Mr. Plow, a snow-removal business, is given in the table below. Quantity…
A: The profit can be calculated by deducting total cost from total revenue as follows:
Q: 1. The Abner Corporation, a retail seller of television sets, wants to determine how many television…
A: In Economics, the average variable cost is the variable cost per unit. Average variable cost is…
Q: 1. Suppose the total cost to a firm of producing a quantity q of some commodity is C(q) = 490 + 20q…
A: Given: C(q) = 490 + 20q + 0.1q2 To find out marginal cost i.e. MC(q), take the first order…
Q: Research and Development money spent by pharmaceutical companies creating new drugs is a sunk cost…
A: A sunk cost refers to those costs that company already been incurred and cannot be recovered. Sunk…
Q: 7 A firm produces widgets in a highly competitive market. The current market price is $100 per…
A: profit maximizing quantity refers a condition where profit is maximum. here we calculate profit…
Q: Average Total Cost (Dollars per bike) Number of Factories Q = 25 Q = = 50 Q = 75 Q = 100 Q = 125 Q =…
A: Quantity SRATC1 SRATC2 SRATC3 LRATC 25 130 165 200 130 50 100 120 140…
Q: 1. Suppose the total cost to a firm of producing a quantity q of some commodity is C(4) - 490 + 20g…
A: a) The marginal cost of the firm can be calculated through the derivation of the cost function with…
Q: A boutique fruit juice manufacturer produces 2 types of juices, Apple and Fig daily with a total…
A: Lagrangian optimization problem has a following setup : Objective function & Constraint…
Q: Calculate Ana's marginal revenue and marginal cost for the first seven shirts she produces and plot…
A: Ana runs a business of shirts. The market for shirts is perfectly competitive.The market price for…
Q: Suppose that the market for microwave ovens is a competitive market. The following graph shows the…
A: Industrial economics is the study and appraisal of business financial issues utilizing abstract…
Q: Which formula represents the profits for a firm? (check all that apply) (AC=average cost,…
A: Total cost is the overall cost incurred in the course of production of the good.
Q: 4. Assess which of the following is true and which is false. A firm’s profit equation is given by π…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: 1. You are running a (small) chain of gourmet burger joints with two locations (San Antonio and…
A: Production cost is the summation of fixed cost and variable cost. and it changes when output…
Q: Now compute the missing marginal revenue from the table. The table is reproduced here for…
A: Marginal Cost (MC):Marginal cost is the additional cost incurred by producing one more unit of a…
Q: QUESTION 11 Use the following graph to answer questions 33 & 34. Price and cost $40 30 23 20 10 0 MR…
A: Economic profit is the difference between the total revenue and total cost which includes both…
Q: Price (dollars) ying graph shows the short-run demand and cost situation for a price searcher in a…
A: Profit maximisation is a process that businesses go through to make sure the best levels of output…
Q: Your business, which has some market power, has the following demand (D), marginal revenue (MR),…
A: A firm will maximize its profit when its marginal revenue is equal to the marginal cost curve. This…
Q: 1. Suppose a firm sells its output for P=20 - Q1000 Where Q is the quantity it produces and sells.…
A: here we calculate the profit maximizing point and quantity by using MR and MC approach , so the…
Q: Lorenzo's profit is maximized when he produces teddy bears. When he does this, the marginal cost of…
A: please find the answer below.
Q: Consider a manufacturer making leather cases with a market demand function (weekly) given by…
A: Profit refers to the difference between total revenue and total costs when producing and selling a…
Q: Monopolistic Competition -- Questions 16-20 refer to Figure 6-2 below. This figure depicts a…
A: Below is the edited graph that shows various marked points:
Q: a. To maximize its profits, the firm should produce [ and charge a price of $ b. What area…
A: A firm produces at the intersection of MR and MC curves to maximize the profit. Hence,…
Q: Which of the following is why the total cost (TC) curve does not start at the origin? a) TC…
A: Total cost curve is the sum total of fixed cost and variable cost.
Q: In the short run, given a market price equal to $15 per romper, the firm should produce a daily…
A: General Equilibrium Theory is a macroeconomic theory that makes sense of how supply and demand in an…
Q: Consider the business whose Total Cost and Total Revenue for various quantities of a particular…
A: Profit is maximized when Marginal Revenue(MR) is equal to the Marginal Cost(MC). This is the point…
Q: A firm faces the following demand and total cost schedules, with all quantities listed on a…
A: Total cost describes the amount of FC and VC incurred by a firm in the production of products or…
Q: There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of…
A: a. There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size…
Q: Pierce Manufacturing determines that the daily revenue, in dollars, from the sale of x lawn chairs…
A: The revenue function will multiply the level of output by the price function. Revenue will be…
Q: The graph to the right depicts the daily total cost and total revenue curves for a firm. If the firm…
A: The equilibrium occurs where the MR = MC. Firm does not have incentive to change the level of output…
Q: (Figure: Joshua's Lawn Mowing Business) Use Figure: Joshua's Lawn Mowing Business. If Joshua's lawn…
A: In a perfectly competitive market, the firms would prefer to produce till the point where marginal…
Q: "A profit maximizing firm seeks to produce at an output where its marginal revenue is equal to its…
A: Profit maximization: Profit maximizing firms produces and sells the goods at the point where the…
Q: 13. The marginal profit for the new X-99 pogo stick is P'(x) = -0.1x + 60 where x is the number of…
A: Total revenue refers to the total quantity of goods and services sold. It can be calculated by…
Q: ·20아 MC ATC AVC 16 12 8. 5 10 15 2O 25 30 35 40 45 50 Quantity (units per day) The above figure…
A: A perfect competition is a market structure in which many vendors and buyers are present. In this…
33 - |
Which of the following will maximize profit? |
|
Step by step
Solved in 3 steps
- The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 25 2.20 30 2.02 2.17 35 2.45 2.21 40 3.57 2.38 45 4.00 2.56 50 5.46 2.85 55 5.93 3.13 60 8.53 3.58 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds?The next 6 questions relate to the following table. Calculate total revenue at a quantity of 5 units. (The table gives you Quantity, Price, and Total Costs, leaving the Total Revenue and Profit for you to calculate.) Quantity Price Total Revenue Total Cost Profit 0 70 0 1 70 60 2 70 120 3 70 180 4 70 300 5 70 410 Calculate profit at an output of 4 units. What is the highest profit possible? What is the profit maximizing level of output What is the profit maximizing price? Can you tell if this is the short run or long run? Explain.FITnest is one of the few fitness centers serving the greater area. The gym has been open for 3 years. It charges a flat price of $25 per visit to its clients, and the firm’s current average cost of production is $10 per visit. (You may assume that average cost has the “traditional U-shape”.) a) The owners of the gym heard you are studying economics, and they want some advice on how they could possibly increase their profits through price discrimination, which is a concept they have heard of but do not know much about. Provide an explanation of what price discrimination is and give them an example of how they could use group pricing in their climbing gym business. Explain how group pricing works to increase their profit. b) Given the current situation in the market for fitness in the area, would you expect to see competitors enter or exit the market? Explain. c) Given the current market conditions, what would you predict to observe in the long run with respect to the demand for…
- Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 Profit or Loss 40 35 30 АТС 25 20 15 10 AVC MC 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Shirts) PRICE AND COST (Dollars per shirt)6. Consider the following information: TC = 20 + 5Q + Q2 Q = 25 – P Where TC is total cost, Q is the total product and P is price. What is the correct expression for total profit? a. 20Q + 5Q2 +20 b. 20 – 2Q2 – Q c. 20Q – 2Q2 – 20 d. Q + 2Q2 + 204. A vertically integrated automobile company has an upstream engine division and a downstream assembly division. The demand for the company's cars is given by Q = 20-P. Each car requires one engine. The downstream division's total cost of assembling cars is TCD(Q) = 4Q. The upstream division's total cost of producing engines is TCv (Q) = Q². (a) Suppose that there is no outside market for engines. What is the price and quantity of cars produced by the company? (b) Suppose that there is no outside market for engines. What should be the transfer price for engines? [Hint: the transfer price of an engine should equal the marginal cost of engine production at the optimal quantity.] (c) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the price and quantity of cars produced by the company? (d) Suppose that there is a competitive outside market in which the price of an engine is 12. What is the quantity of engines that the company buys or…
- Lisa’s Lawn Company (LLC) is a lawn-mowing business in a perfectly competitive market for lawn-mowing services. The following table sets out Lisa’s costs. Quantity (Lawns per hour Total Cost (dollars per lawn) 0 $30 1 40 2 55 3 75 4 100 5 130 6 165 If the market price is $30 per lawn, how many lawns per hour does Lisa’s LLC mow? If the market price is $30 per lawn, what is Lisa’s profit in the short run? If the market price falls to $20 per lawn, how many lawns per hour does Lisa’s LLC mow?Problem #1: Assume that the following marginal costs exist in catfish production: 17 Quantity Produced (units per day) Marginal Cost (per unit) 10 11 12 13 14 15 16 $4 6 8 10 12 14 16 18 (a) Graph the MC curve. (b) Use the data on market demand below and graph the demand and MR curves on the same graph. Quantity demanded (units per day) 10 Price (per unit) 11 12 13 14 15 16 17 $25 24 23 22 21 20 19 18 (c) At what rate of output is MR = MC?3. Johnny Rockabilly has just finished recording his latest CD. His record company's marketing department determines that the demand for the CD is as follows: Price Number of CDs $24 10 000 22 20 000 20 20 30 000 18 40 000 16 50 000 14 60 000 The company can produce the CD with no fixed cost and 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 revenue for each 10 000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would be the price? What would be the profit? c. If you were Johnny's agent, what recording fee would you advise Johnny to demand from the record company? Why?
- Consider the following information: TC = 15 + 5Q + Q² %D Q = 30 – P Where TC is total cost, Q is the total product and Pis price. What is the profit maximising quantity? a. 9.47 b. 7.51 C. 6.25 d. 0Suppose that over the short run (say the next 5 years), demand for OPEC oil is given by P = 165 – 2.5q. Here q is measured in millions of barrels a day. OPEC marginal cost per barrel is $15. What is OPEC’s optimal level of production? What is the prevailing price of oil at that level? Many experts contend that maximizing short-run profit is counterproductive for OPEC in the long run because high price reduces buyers to conserve energy and spur competition and new exploration that increases the overall supply of oil. Suppose that the demand curve just described will remain unchanged only if oil prices stabilize at $65 per barrel or below. If oil price exceeds this threshold, long run demand (over a second five year-period) will be curtailed to P = 135 – 2.5q. OPEC seeks to maximize its total profit over the next decade. What is the optimum output and price policy? (assume all values are present values)