Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 2SQ
To determine
The production decision of the firm.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Chetan's Fishing Rods is a small business that operates as a price-taker. The market
price of a fishing rod is $30 and Chetan's long-run costs are given by
C(q) = .1q° + 10q + 10,
where
is the number of fishing rods that Chetan produces. Answer the following:
(a) How many rods does Chetan produce to maximize profits?
(b) What are his profits?
(c) At what level of output are average costs minimized?
(d) Find an expression for Chetan's supply curve.
(e) Sketch Chetan's supply curve, his marginal cost curve and his average cost curve.
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.
(a) What is the firm’s total fixed cost? You must show your work.
Refer to the above figure. The firm is currently producing at Q2. The firm shouldSelect one:A.shut down.B.increase production.C.leave production as it is.D.reduce production.
Chapter 8 Solutions
Micro Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
Knowledge Booster
Similar questions
- Explain why a firm carries on production in short run even if it makes negative profit. Use well labeled diagrams to support your explanation.arrow_forwardSuppose a firm in a perfectly competitive industry is currently producing output at its profit-maximizing quantity. If the firm's marginal cost is less than its average total cost, MC < ATC, the firm will earn ________ profits. a.negative b.positive c.zero d.break-evenarrow_forwardA perfectly competitive, profit maximizing firm is producing a quantity such that AVC < MC < ATC. We know at that quantity: Group of answer choices ATC is falling but AVC is rising. Economic profit would decrease if the firm were to shut down. The firm is producing with economies of scale. All of the other choices are true.arrow_forward
- microeconomics . This firm will maximize profit by producing at output level: (pick the correct letter) f g h jarrow_forwardIf the market price of a product is $10 that lie between the minimum average variable cost $8 (AVC) and minimum average total cost $15 (ATC) of a firm, that firm will:___________ a) always shut down. b) always continue to produce.c) produce in the short run but shut down in the long run. d) produce in the long run but shut down in the short run. e) make positive economic profits.arrow_forwardDraw and describe a diagram representing the cost curves – MC, AC, and AVC – for a profit-maximizing firm under perfect competition. Show U-shaped AC and AVC curves. Label the breakeven and shut down prices. Also, show a price between the breakeven and shut down prices and explain how the firm decides on its profit-maximizing/loss-minimizing output level at that price and show how the amount of profit or loss can be shown in the diagram. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- 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 inconsistentarrow_forwardA breakfast place, a perfectly competitive eatery, sells its special for $5. Cost of waiters, cooks, and power average out to $3.95 per meal; cost of lease, insurance and other expenses average out to $1.25 per meal. What should this owner do. A)close her doors immediately b)continue producing in the short and long run c)continue producing in the short run, but plan to go out of business in the long run if price does not increase in the future d)raise her prices above the perfectly competitive level e)lower her outputarrow_forwardPrice and Cost 961 The graph below contains the relevant cost curves for a perfectly (or purely) competitive firm. The graph below is not graded. You can move point A to help you answer the questions. 1000 900 800 700 600 500 400 300 200 100 0 0 MC Quantity ATC AVC AFC 100 200 300 400 500 600 700 800 900 1000 860 The price of the good must be above what point for the firm to earn positive economic profits? Number $ 600 What is the shutdown price for this firm? Number $400arrow_forward
- fastarrow_forwardQuestion 24 In perfect competition, in the long run, P=minimum ATC. True Falsearrow_forwardIn the short run a firm can minimize costs by shutting down. minimize costs by going out of business. maximize profit by selling the factory. all of the above are correct. none of the above are correct.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning