Your company sells Beyonce concert DVDS. Total fixed costs for your operation are $10,000 a year. The variable costs are: 50Q – Q (Q is in hundreds) The firm pays $500 a year in various taxes. The market price of these DVDS is $40. Beyonce has many fans. Show your work/thought process: a. Should the firm shut down in the short run? Explain. b. If the firm's fixed costs decreased from $10,000 to $8,000, would the firm shut down in the short run?

Your company sells Beyonce concert DVDS. Total fixed costs for your operation are $10,000 a year. The variable costs are: 50Q – Q (Q is in hundreds) The firm pays $500 a year in various taxes. The market price of these DVDS is $40. Beyonce has many fans. Show your work/thought process: a. Should the firm shut down in the short run? Explain. b. If the firm's fixed costs decreased from $10,000 to $8,000, would the firm shut down in the short run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Average Fixed Costs (AFC) is equal to A. Average Total Cost (ATC) - Average Variable Cost (AVC).…

A: The correct Option is (D) - All of the above

Q: The above cost curves are for a firm producing flour, which is measured in pounds. 1. What is the…

A: A cost curve is a graph that shows the costs of production as a function of the overall quantity…

Q: Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His…

A: Total Revenue=$27*10=$270 Total Explicit Cost=Total Cost-Fixed Costs Total Explicit Cost=$280-$30…

Q: Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show…

A: An economic profit or loss is the difference between the revenue gained from the sale of an output…

Q: Matthew Rafferty produces hiking boots in the perfectly competitive hiking boot market. The table…

A: AFC = TFC/ Output AVC = TVC/ OutputATC = TC /Output MC = TCn - TCn-1TFCIt is constant at each level…

Q: onsider the production process for a Vending Machine Service. Identify the fixed costs associated…

A: Small business can be described as a partnership, privately-owned company, or sole proprietorship…

Q: 16 14 12 10. ATC AVC MR 10 20 30 40 50 60 70 80 90 100 11o 120 Quantity Price Total Revenue

A: We will answer the first three subparts only. Please resubmit the question with any other parts…

Q: that the fixed costs are $5780 per week and the cost of producing each set of clubs is $73.00. Each…

Q: Laura’s cleaning service is a profit-maximising, competitive firm. Laura cleans a whole house for…

A: Here, given information is: Laura'a per house revenue: $156 Laura'a per day total cost: $1680 Her…

Q: None

A: From the analysis of the cost curves and the given price of $12, we can draw several important…

Q: Our firm’s accountants have put together the following table of costs. Generators Solar Panels…

A: Generators business: Fixed cost=$2 million Variable cost=$2 million Revenue=$3 million Solar panels:…

Q: A profit-maximizing business incurs an economic loss of $$30,000 per year. Its fixed cost is $45,000…

A: Short run business decision: It is given that, it is a profit-optimizing firm that incurs an…

Q: 1) Use the graph to answer the question below. The quantity is measured in thousands of units.…

A: As per the guidelines answer is given to the first question. (1) As per the diagram given in…

Q: uan makes dining room chairs in a perfectly competitive industry. He is looking for economic advice…

A: Perfectly competitive market refers to the market which is characterised by presence of large number…

Q: 11. Madibaz is a company that produces t-shirts. The firm operates in a highly competitive, industry…

A: here we calculate the Madlibaz total profit by using the given information which are as follow-

Q: 1. Suppose the firm's short run total cost function is TC = 10 + 10q-q² +0.25q³ and marginal cost is…

Q: Currently the firm is producing at a profit maximizing quantity of output and has a total revenue of…

A: Marginal cost is the additional cost of producing one more unit of a good. Marginal revenue is the…

Q: A strawberry farm operating in a perfectly competitive market is operating below the break-even…

A: Definition: A shutdown point is a level of tasks at which an organization encounters no advantage…

Q: The gap that exists in a graph between total costs and fixed costs represents the variable costs of…

A: Total cost is the sum of variable and fixed costs. TC = TVC + TFC

Q: “A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?

A: Economic Cost consists of explicit cost and implicit cost. In other words it consists of sum of…

Q: Bob's lawn mowing service is a profit maximizingcompetitive firm. Bob mows lawns for $27 each. His…

A: A competitive firm is one that is a price taker and can sell any quantity of goods at the given…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: The graph you have shows a firm's short-run cost curves, which depict how costs change with…

Q: Jeb owns a small marketing company, which he operates from a home office. Jeb’s home office is an…

A: Fixed Cost remains same at all levels of output. Marginal Cost is the additional cost incurred while…

Question

Your company sells Beyonce concert DVDS. Total fixed
costs for your operation are $10,000 a year. The variable costs
are: 50Q – Q
(Q is in hundreds)
The firm pays $500 a year in various taxes. The market price of
these DVDS is $40. Beyonce has many fans.
Show your work/thought process:
a. Should the firm shut down in the short run? Explain.
b. If the firm's fixed costs decreased from $10,000 to
$8,000, would the firm shut down in the short run?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In the short run, a firm's total costs of producing 100 units of output equal $10,000. If it produces one more unit, its total costs will increase to $10,150. a. What is the marginal cost of producing 101 instead of 100 units of output? b. What is the firm's average total cost of producing 100 units? c. What is the firm's average total cost of producing 101 units?
Variable costs are Multiple Choice costs that remain to be paid even if the firm shuts down temporarily. costs that change every day or every month. costs that change with the level of production. changes in total cost due to the production of an additional unit of output.
The vertical distance between ATC and AVC as output expands is aa. marginal costb. total fixed costc. average fixed cost d. economic profit per unitPlease, show your answer graphically.
Which of the following represents a long-run decision for the firm? a. rehiring workers who were previously laid off. b. determining what price to charge for a given level of output. c. deciding how much output to supply to the market at the current market price. d. building another wing on the plant in order to add a new assembly line. answer. (d. building another wing on the plant in order to add a new assembly line.) Please help me explain this questions. Thanks in advance
I. A company produces at an output level where marginal cost is equal to marginal revenue and has the following revenue and cost levels: Total revenue = $1,450 Total cost = $1,500 Total variable cost = $1,300 What would you suggest? a. Shut down. b. Continue to produce because the loss is less than the total fixed cost. c. Increase production to lower the marginal cost. e. Raise the price. II. At current long-run production levels, the marginal revenue of a competitive firm is $15 and the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should a. cut back on production. b. stop production all together. c. produce more. d. continue producing at current levels.
Three college students are considering operating a tutoring business in economics. This business would require that they give up their current jobs at the stu- dent recreation center, which pay $6,000 per year. A fully equipped facility can be leased at a cost of $8,000 per year. Additional costs are $1,000 a year a. What are fixed costs?b. What are variable costs? c. What is the marginal cost?
Could I have help with c and d (and making sure the first part is correct) ?
Can you help solve the rest of these?
ABC company's total cost when it produces 20 units is $100. ABC's total cost is $120 when it produces 22 units. What is ABC's marginal cost of producing the 22nd unit?
3. XYZ corporation produces widgets. Its short-run marginal cost curve is given by MC (q) = 10 – 5q + q² (this is a parabola whose minimum occurs at q = 2.5). XYZ's fixed costs are 10. In a two panel diagrams, graph the following cost curves: (a) total cost, (b) total variable cost, (c) total fixed cost, (d) marginal cost, (e) average variable cost, and (f) average total cost. Your diagrams do not need to be scale, but must be internally consistent (i.e. the relationships between different curves must be correct). You do not need to find mathematical expressions for the other cost curves – you only need to sketch lines that are consistent with the shape of the marginal cost curve.
36 Total Total Average Average Output Fixed Variable Total Variable Total Marginal (Q) Cost Cost Cost Cost Cost Cost I of 150 $500 $400 $900 $2.67 200 $500 $800 $1,300 $6.50 The table above shows costs for a firm. When Output (Q) changes from 150 to 200, Marginal Cost (MC) is equal to: Select one: a. $400 b. $8.00 c. $4.00 d. $5.00
Thinking on the Margin to Increase Profitability Have you ever walked into a restaurant for lunch and found it almost empty? Why, you might ask, does the restaurant even bother to stay open? It might seem that the revenue from so few customers could possible cover the cost of running the restaurant. Provide an opinion using the concepts of sunk costs, marginal cost and marginal revenue.