Profit or loss of a firm

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

You are the manager of a large automobile dealership who wants to learn more about the effective- ness of various discounts offered to customers over the past 14 months. Following are the average negotiated prices for each month and the quantities sold of a basic model (adjusted for various options) over this period of time. 1. Graph this information on a scatter plot. Estimate the demand equation. What do the regression results indicate about the desirability of discounting the price? Explain. Month Price Quantity Jan. 12,500 15 Feb. 12,200 17 Mar. 11,900 16 Apr. 12,000 18 May 11,800 20 June 12,500 18 July 11,700 22 Aug. 12,100 15 Sept. 11,400 22 Oct. 11,400 25 Nov. 11,200 24 Dec. 11,000 30 Jan. 10,800 25 Feb. 10,000 28 2. What other factors besides price might be included in this equation? Do you foresee any difficulty in obtaining these additional data or incorporating them in the regression analysis?

Answer 2

Question

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Answer 6

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Answer 7

Chapter 8, Problem 1QFR

To determine

Profit or loss of a firm

Answer 8

Expert Solution & Answer

Explanation of Solution

The profit equation for a firm is −

π = TR- TC

Here, π = Profit

TR= Total Revenue received through sales of output

TC= Total Cost met by the firm

TC comprises of Explicit Costs and Implicit Costs.

Explicit costs are the direct payments made during production process such as wages, rent and raw materials.

Implicit cost means any cost that has already incurred but not compulsorily shown or reported as a different expense. It indicates an opportunity cost which emerges at the time when the firm makes use of internal resources for production purpose.

When TR>TC, the firm earns profit and when TC> TR, it faces loss.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Introduction:

Profit is the gap at the total revenue income received through sales and total cost met by a firm in to produce certain level of output. Surplus of total revenue received by the firm over total cost incurred by same the firm indicates profit. On the contrary, Excess of total cost incurred by the firm over total revenue received by the same firm indicates loss.

Answer 12

Ch. 8 - Prob. 1QFR Ch. 8 - Prob. 2QFR Ch. 8 - Prob. 3QFR Ch. 8 - Prob. 4QFR Ch. 8 - Prob. 5QFR Ch. 8 - Prob. 6QFR Ch. 8 - Prob. 7QFR

Profit or loss of a firm

Profit or loss of a firm

Explanation of Solution

Want to see more full solutions like this?

Chapter 8 Solutions