. Consider total cost and total revenue given in the table below:
QUANTITY 0 1 2 3 4 5 6 7
Total cost $8 $9 $10 $11 $13 $19 $27 $37
Total revenue 0 8 16 24 32 40 48 56
a. Calculate profit for each quantity. How much should the firm produce to maximize profit?
b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2 1/2.)
At what quantity do these curves cross? How does this relate to your answer to part (a)?
c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?
5. Consider total cost and total revenue given in the following table: a. Calculate profit for each quantity. How much should the firm produce to maximize profit? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2/½.) c. At what quantity do the curves in part b cross? How does this relate to your answer to part a.? d. Can you...
Consider total cost and total revenue given in the following: (Quantity/Total Cost/Total Revenue): (0/8/0), (1/9/8), (2/10/16), (3/11/24), (4/13/32), (5/19/40), (6/27/48), (7/37/56) Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium? Isn't this firm a competitive industry since the price is equal to the marginal revenue? This is obviously a competitive industry because the average revenue is always the same. But the euqilibrium is not the...
9. Problems and Applications Q4 Consider total cost and total revenue, given in the following table: In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Quantity Total Cost Marginal Cost Total Revenue Marginal Revenue Profit (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 8 0 1 9 8 2 10 16 3 11 24 4 13 32 5 19 40 6 27 48 7 37 56 In...
Consider total cost and total revenue, given in the following table: In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Quantity Total Cost Marginal Cost Total Revenue Marginal Revenue Profit (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 6 0 1 8 7 2 10 14 3 13 21 4 17 28 5 24 35 6 32 42 7 42 49 In order to maximize profit, how...
3. Problems and Applications Q3 Consider total cost and total revenue, given in the following table: We were unable to transcribe this image10 T Marginal Revenue Marginal Cost Quantity of 6 units The marginal-revenue curve and the marginal-cost curve cross at a quantity , as quantity increases. in a competitive industry, because marginal revenue is This firm is not True or False: The industry is in a long-run equilibrium True O False
b) (4 points) Graph demand, marginal revenue, marginal cost and average total cost (ATC) below. Mark Q*, P*, ATC* (you’ll have to calculate it) and the endpoints to all of the curves. c) (2 points) Given your answers above, explain which curve(s) will shift in the long run and why. d) (4 points) Draw the graph that represents this firm in the long-run. Label the profit-maximizing price and quantity as P* and Q*, respectively. No numbers are necessary, but be...
5. Deriving the short-run supply curve Consider the perfectly competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. ? 80 72 64 56 40 АТС AVC 8 МС О 0 8 16 24 32 40 48 56 64 72 80 QUANTITY OF OUTPUT (Thousands of shirts) PRICE AND COST PER UNIT (Dollars) For each price in the following table,...
The curves show the marginal revenue (MR), marginal cost (MC), and average total cost (ATC) functions for a firm in a competitive market. Use the area tool to draw the area representing the maximum profit the firm could earn—that is, the profit the firm would earn if it produced the optimal quantity. Your answer should be a rectangle drawn with four corners.
The table below shows the costs and demand for the clove oil industry. Total Revenue Marginal Revenue Marginal Cost Total Cost Total Profit/Loss Quantity Price 136 162 190 a. Complete the table above. b. If this industry was perfectly competitive, what would be the output, price, and total industry profit/loss? Output: Price: $0 Profit/loss: $ c. If this industry was a monopoly industry, what would be the output, price, and total industry profit/loss? Output: O Price: $0 Profit/loss: $0
ttempts: ampts: 0 Keep the Highest: 0/3 3. Profit maximization using total cost and total revenue curves Suppose Sean runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Sean's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Sean...