Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 13, Problem 13QE
To determine
Graphical representation of a firm under
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The graph attached illustrates the Demand, Marginal Revenue, Marginal Costs, Average Total Costs and Average variable Cost curves for a firm in a perfectly competitive market.
What is the breakeven price? Explain your answer.
What is the shot down price? Explain your answer.
Tomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which sell for $30 a bushel. At this level of output, the marginal cost is $30 a bushel, average variable cost is $30.50 a bushel, and average total cost is $34.50 a bushel.
Should the firm increase output, decrease output, or not produce? Explain.
A firm in a perfectly competitive industry knows the following about its costs and revenue. The firm would like to maximize
profit and has hired a consultant for advice.
Price
Q of Output
Total Revenue
Total Cost
Total Fixed Cost
10
500
TR?
9,400
TFC ?
Total Variable Cost
Average Total Cost
Average Variable Cost
MC
6,500
is at minimum level
AVC?
MC?
Total Revenue Number
Total Fixed Cost Number
Average Variable Cost Number
Marginal Cost Number
What is the value of the profit or loss (-) at the current output ( include the - sign if it's a loss) Number
Consultant's Advice: As a consultant, what advice would you give to this firm:(Choose ONE answer from the
following)
Number
1. Firm should do nothing; it is already profit maximizing/loss minimizing
2. Firm should reduce quantity of output
3. Firm should increase quantity of output
4. Firm should shutdown operations
5. The given number set is inconsistent
Chapter 13 Solutions
Microeconomics
Ch. 13.1 - Prob. 1QCh. 13.1 - Prob. 2QCh. 13.1 - Prob. 3QCh. 13.1 - Prob. 4QCh. 13.1 - Prob. 5QCh. 13.1 - Prob. 6QCh. 13.1 - Prob. 7QCh. 13.1 - Prob. 8QCh. 13.1 - Prob. 9QCh. 13.1 - Prob. 10Q
Ch. 13 - Prob. 1QECh. 13 - Prob. 2QECh. 13 - Prob. 3QECh. 13 - Prob. 4QECh. 13 - Prob. 5QECh. 13 - Prob. 6QECh. 13 - Prob. 7QECh. 13 - Prob. 8QECh. 13 - Prob. 9QECh. 13 - Prob. 10QECh. 13 - Prob. 11QECh. 13 - Prob. 12QECh. 13 - Prob. 13QECh. 13 - Prob. 14QECh. 13 - Prob. 15QECh. 13 - Prob. 16QECh. 13 - Prob. 17QECh. 13 - Prob. 18QECh. 13 - Prob. 19QECh. 13 - Prob. 20QECh. 13 - Prob. 1QAPCh. 13 - Prob. 2QAPCh. 13 - Prob. 3QAPCh. 13 - Prob. 4QAPCh. 13 - Prob. 5QAPCh. 13 - Prob. 1IPCh. 13 - Prob. 2IPCh. 13 - Prob. 3IPCh. 13 - Prob. 4IPCh. 13 - Prob. 5IP
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