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 8, Problem 1.5P
To determine
The fixed cost.
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Chapter 8 Solutions
Principles of Economics (12th Edition)
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- If you're a manager in a highly competitive business such where should you put your most effort to maximize profit? Pricing or cost cutting?arrow_forwardIn the ice cream industry, in the short run, what cost includes the cost of cream and sugar, but not the cost of the factory. Choose all answers that are correct. a.Marginal cost b.Variable cost c.Fixed cost d.Average total costarrow_forwardWhat does it mean to be operating a firm in the "long run?" What does it mean to be operating a firm in the "short run"? What are the practical implications for managing a business if you are in "short run?arrow_forward
- Family Mart like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this? It is clear that businesses operate in the short run, but do they ever operate in the long run? Discuss. What are the different type of costs incurred in the short run and in the long run?arrow_forwardWhat is long run and short run production? What is immediate market periodarrow_forwardWhich of the following profits represent economic profit? Choose all that apply. a. A restaurant makes $10,000 per month in total revenue. Supplies cost $2,000 per month, and labor costs are $3,000 per month. The restaurant's profit is $5,000. b. During the summer, you make ten go-karts and sell each one for $100. It costs you $200 in supplies You could have made $500 during the summer if you had chosen to deliver phone books. Your total profit is $300. c. A high-end airplane company sells five private jets per year. Each jet is sold for $10 million. The profit margin is 12 percent . If you were to change course and make yachts with the same available resources , you would make no additional profit. d. Your company sells 1, 000 cars per month . Each car costs $20,000 . Your cost for parts is $4 million . Your labor costs are $3 million . Your total profit is $13 million .arrow_forward
- Ball Bearings Inc. faces costs of production as follows:Quantity Total Fixed cost Total Variable Cost0 200 01 200 502 200 703 200 904 200 1405 200 2006 200 360a. Calculate the company’s average fixed costs, average variable costs, average total costs, andmarginal costs. a. The price of a case of ball bearings is $50. Seeing that she can’t make a profit, the chiefexecutive officer (CEO) decides to shut down operations. What are the firm’s profits/losses?Was this a wise decision? Explain. b. Vaguely remembering his introductory economics course, the chief financial officer tells the CEOit is better to produce one case of ball bearings because marginal revenue equals marginal costat that quantity. What are the firm’s profits/losses at that level of production? Was this the bestdecision? Explain.arrow_forward2arrow_forwardQuestion 19 In economics, the 'long-run' refers to the time period when all factors of production are fixed. some factors of production are fixed, others may vary. profit is fixed. all factors of production may change. A B C Darrow_forward
- Price MC ATC IC MR Quantity a. What area(s) of the graph represent(s) total revenue for this firm if it was profit maximizing? b. What area(s) of the graph represent(s) total cost for this firm if it was profit maximizing? c. What area(s) of the graph represent(s) profits for this firm if it was profit maximizing? d. What area(s) of the graph represent(s) deadweight loss if the firm was profit maximizing?arrow_forwardDesignated cost incurred by the short-run firm. Select one: a. fixed cost b. total cost c. variable cost d. average costarrow_forwardWhat is the shutdown condition? a.A condition stating when a firm should cease to operate and produce nothing, because profits are maximized when not producing b.A condition saying when the school should shut down due to public health concerns c. In the short run, the shut down condition is TR < VC . In the long run, it is TRarrow_forward
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