Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 10, Problem 5.1P
(a)
To determine
The profit maximizing firm.
(b)
To determine
The action adopted by the firm to increase the profits.
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Students have asked these similar questions
The theory of the firm mostly assumes that the goal of the firm is to maximize *
sales.
revenues.
profits.
future profits.
a software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?
Total Revenue function = 164x
Total Cost function = 0,01x2+20x+300
x shows unit of production. Find :
a. how much x we need to produce to reach maximum profit
b. maximum profit
c. prove why the x you get will reach maximum profit
Chapter 10 Solutions
Principles of Economics (12th Edition)
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- Price ($/slice) For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $0.25 per slice? Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Then, indicate the profit-maximizing level of output on the graph. Cost Curves 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 I Select ▼ Select Select 100 200 300 400 500 600 700 800 900 Quantity (slices/day)arrow_forwardWhy is it important for managers to understand the mechanics of supply and demand both in the short run and the long run? Give examples of companies whose business was either helped or hurt by changes in supply or demand in the market in which they are competing.arrow_forwardSuppose that the firm’s demand curve indicates that at a price of $10 per unit, customers will demand 2 million units of its product. Suppose that management decides to pick both price and output; the firm produces 3 million units of its product and prices them at $18 each. What will happen?arrow_forward
- There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through economies of scale government protection control of an important input . b. ABC’s market power does does not guarantee that the firm makes an economic profit.arrow_forwardYou are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost schedule: Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. Should you accept the offer? Why or why not. Single line text.arrow_forwardOnly typed answerarrow_forward
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