CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 4DQ
To determine
Productive efficiency and allocative efficiency .
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
LO 11.2: I can calculate marginal cost, revenue, and profit and distinguish between marginal cost
and average cost.
Suppose that Patrick's Handmade Puppets has a production cost that is given by
C(x) = 2,000 + 130x – 0.6x2 + 0.002x3 dollars
(0
.ll touch LTE
10:05 PM
O 9 37% O
A docs.google.com
In a perfectly competitive market, what
happens to a firm's profit-maximizing
level of output if the price of the
product falls? *
Because the firm maximizes profit by
setting marginal revenue equal to
O marginal cost, an increase in the price
of the product will reduce the firm's
profit-maximizing level of output.
Because the firm maximizes profit by
setting marginal revenue equal to
marginal cost, a decline in the price of
the product will not affect the firm's
profit-maximizing level of output.
Because the firm maximizes profit by
setting marginal revenue equal to
marginal cost, a decline in the price of
the product will reduce the firm's
profit-maximizing level of output.
Because the firm maximizes profit by
setting marginal revenue equal to
marginal cost, a decline in the price of
the product will increase the firm's
profit-maximizing level of output.
Knowledge Booster
Similar questions
- Consider table 3.1. What is the dollar amount of average variable cost per unit at the production level of 600 units? TC=3205 Production (units) 0 100 Select one: O a. 4.04 O b. 4.34 Oc 4.74 O d. 5.04 200 300 400 500 600 700 Rent $300 $300 $300 $300 Wages $200 $410 $650 $900 $1,200 $300 $300 $1,520 $300 $1,905 $300 $2,300 Supplies Tools $0 $100 50 $100 $150 $200 $250 $300 $350 $200 $300 $400 $500 $600 $700 $800 Total Cost $600 $960 $1,350 $1,750 $2,200 $2,670 $3,205 $3,750 3205 700 300 2,205 TVC 1 - 2205/600= 3.675 Aarrow_forward7. Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in the figure. What plant size will the firm choose in producing (a) 50, (b) 130, (c) 160, and (d) 250 units of output? Draw the firm's long-run average-cost curve on the diagram and describe this curve. LO9.4 ATC 0 M 150 ATC2 ATC₁ ATC3 80 240arrow_forward4. Various measures of cost Suppose the imaginary company of Roobek is a small, Jackson-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost (Pairs) (Dollars) (Dollars) 0 1 2 3 4 LO 5 6 120 200 240 285 340 425 540 Fixed Cost Variable Cost (Dollars) (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair)arrow_forward
- The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for totalcost, average variable cost, average total cost, and marginal cost.arrow_forwardConsider three firms, A, B and C, all producing kilos of potatoes (per year). The diagrams for the marginal cost curves for each of the three firms are shown. Suppose that the total quantity for the market is 1200 kilos of potatoes. Keeping total output unchanged, what level of output should each firm be producing such that the industry is productively efficient? Assume all the points are on the marginal cost curve. O A. Firm A: 400 kilos, Firm B: 400 kilos, Firm C: 400 kilos B. Firm A: 550 kilos, Firm B: 650 kilos, Firm C: 0 kilos O C. Firm A: 150 kilos, Firm B: 400 kilos, Firm C: 650 kilos O D. FirmA: 400 kilos, Firm B: 400 kilos, Firm C: 150 kilos O E. Firm A: 400 kilos, Firm B: 650 kilos, Firm C: 150 kilos Cost ($) Cost ($) Cost ($) 2+ 2+ 150 150 Firm A 400 Quantity of potatoes Firm B 550 400 Quantity of potatoes Firm C 400 Quantity of potatoes 650 650 MCA MC₂ 750 MCC Q ✓ ON Q Qarrow_forwardFigure 7.7. What is the marginal gainin output from increasing the number of barbers from4 to 5 and from 5 to 6? Does it continue the pattern ofdiminishing marginal returns?arrow_forward
- Please no written by hand and no emagearrow_forwardA company producing cell phone cases uses either rubber (x)) or plastic (x) with the following production function: y = x + where y stands for the number of cases produced, and x and x; stand for, respectively, the amount of rubber and the amount of plastic used (both in ounces). 1st attempt Feedback O See Hint Suppose the firm has signed a contract to purchase 180 ounces of rubber. This contract must be honored. Furthermore, the rubber has a very short shelr life if not used for production. That is, if the rubber is not used immediately, it will be wasted. Let an be the price of an ounce of rubber, and o be the price of an ounce of plastic. Suppose the firm wants to make 330 cell phone cases. The conditional factor demand for ounces of plastic totals 1500 5. and zero otherwise.arrow_forwardRemi owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Remi could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His economic profit last year was O $89,000 O $94,500 O $97,000 O 554,000 O $62,000arrow_forward
- The table below shows cost data for WipeOutSki Company which manufactures skis for beginners. If the company's fixed costs are $30, what is the marginal cost of five units of output? Variable Cost Fixed Cost Total Cost Average Variable Cost Average Total Cost Marginal Cost Quantity $30 1 $10 $30 $25 $30 $45 $30 $70 $30 $100 $30 B. $135 $30 O $45.00 O S30.00 O S25.00 2) 3. 4) 69arrow_forwardIf You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. then your economic profit is Select one: a. 10,000 O b.-10,000 O c. -40,000 O d. 20,000 O e. 40,000arrow_forwardhello i need an answer in 10minutes thankssarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
