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Homework Answers
Question 4
When a firm faces a downward sloping demand curve then, in that case, marginal revenue curve lies below the demand curve.
The downward sloping demand curve indicates that firm has to lower price to sell more. As marginal revenue curve lies below the demand curve, additional revenue earned from each successive unit sold is less than the price.
So, marginal revenue from each additional unit sold is less than the price.
Thus, MC < Price for any firm that faces a downward sloping demand curve.
Marginal revenue is equal to zero when the total revenue is at its maximum.
When price elasticity of demand is one then marginal revenue is greater than zero.
A firm maximizes profit when it produce that level of output corresponding to which marginal revenue equals the marginal cost.
So, marginal revenue = marginal cost when profits are maximized.
Hence, the correct answer is the option (C).
Note - As HOMEWORKLIB Answering Policy, in case of multiple questions being posted, 1st question is answered with elaborate explanation.
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4. Which of the following...
Please show as much work and explanation as possible, thank you so much! Part 2: For...
Please show as much work and
explanation as possible, thank you so much!
Part 2: For each question below, select all answers that are correct (there may be more than one correct answer, there may be none). Each potential answer is worth 2 points. MPK then we can conclude that: PK MPL 1. If PL (a) The firm should use more capital (K) and less labor (L) (b) The firm is not operating on its Long Run Average Cost Curve....
Please show as much work and explanation as possible, thank you so much! 7. Which ones of the followings are true in per...
Please show as much work and explanation as
possible, thank you so much!
7. Which ones of the followings are true in perfectly competitive markets? (a) The industry demand curve is flat. (b) Firms' marginal revenue is constant as quantity varies. (c) From a firm's perspective, its price elasticity of demand is zero. 8. Which ones of the followings are true about firms’ short-run behavior in a perfectly competitive market? (a) Firms shut down whenever profit is negative. (b) Firms...
Please show as much work and explanation as possible, thank you so much! 10. Which ones of the following statements are...
Please show as much work and explanation as
possible, thank you so much!
10. Which ones of the following statements are true about perfectly competitive markets? (a) The short run supply curve for a firm is upward sloping due to the law of diminishing returns. (b) The industry's short run supply curve is upward sloping due to the law of diminishing returns. (c) The slope of the long run supply curve for an individual firm depends on the industry cost...
Please help! Show all work and label answers clearly please! Thank you! 2. (12 total points,...
Please help! Show all work and label answers clearly please!
Thank you!
2. (12 total points, Suppose a firm can use either Capital (K) or Labor (L) in a production process. The firm's production function is given by Q = 5L + 15K. The price of Capital is $20 per unit and the price of Labor is $8 per unit. a) (4 points) What is the firm's Total Cost function? TC(Q) = b) (8 points) Suppose the firm is producing...
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QUESTION 4 The slope of an isocost line shows: the ratio of the marginal revenue product of the inputs. O the ratio of marginal product of the inputs. the marginal rate of technical substitution. the ratio of the input prices. the output elasticity of production. QUESTION 5 If the marginal product per dollar spent on capital is less than the marginal product per dollar spent on labor, then in order to minimize costs the firm should use less capital and...
please explain in detail 1. (10%) (Interlor Solutions) Consider the graph below which shows a firms...
please explain in detail
1. (10%) (Interlor Solutions) Consider the graph below which shows a firms isoquant for q = 100 and several isOcost lines, where C, < C2< C. Assume the firm is constrained to produce this 100 units and its goal is to minimize costs. к. В E 7-100 C,>C C>C a. Explain why the firm will not employ an input mix of capital and labor at point A. b. Using the last-dollar rule, explain why the firm...
Question 46 2p Which of the following is true of the profit, earned by a monopolist?...
Question 46 2p Which of the following is true of the profit, earned by a monopolist? Profit is maximized along the inelastic portion of the demand curve. Normal profit is ensured where price is equal to average total cost. Normal profit is ensured where marginal cost exceeds average revenue. Economic profit is made where average variable cost equals marginal revenue. Profit is maximized where marginal revenue exceeds marginal cost. Question 47 2 pts A non-price discriminating monopolist's demand curve: is...
Please explain in details with step-by-step solution, Thank you very much b) Evren wants to go...
Please explain in details with step-by-step solution, Thank you
very much
b) Evren wants to go into the donut business. For $500 per month he can rent a bakery complete with all the equipment he needs to make a dozen different kinds of donuts (K-1, r-500). He must pay unionized donut bakers a monthly salary of $400 each. He projects his monthly production function to be Q 5KL, where Q is tons of donuts. i) With the current level of...
Question 14 1 pts If the price elasticity of supply was calculated as 0.40 for a...
Question 14 1 pts If the price elasticity of supply was calculated as 0.40 for a product and the price increases by 12%, what would happen to the quantity supplied? O Quantity supplied would increase by 8%. O Quantity supplied would increase by 6.3%. O Quantity supplied would increase by 4.8%. Question 15 1 pts As we move along a typical negatively sloping, linear demand curve O the elasticity is constant. it results in elasticity and slope being the same....
Use first order condition and second order condition thank you so much Тип уоu • 7. Perfectly competitive firm fac...
Use
first order condition and second order condition
thank you so much
Тип уоu • 7. Perfectly competitive firm faces P(Q) = inverse demand curve and its costs are given by a cost function C(Q), assuming that marginal costs are positive. Firm is also taxed at rate t per unit of output. (a) Write down the firm's profit function. Identify the choice variable, and the parameter if the firm maximizes the profit. (b) Write down the FONC for profit maximization....
Please show as much work and
explanation as possible, thank you so much!
Part 2: For each question below, select all answers that are correct (there may be more than one correct answer, there may be none). Each potential answer is worth 2 points. MPK then we can conclude that: PK MPL 1. If PL (a) The firm should use more capital (K) and less labor (L) (b) The firm is not operating on its Long Run Average Cost Curve....
Please show as much work and explanation as
possible, thank you so much!
7. Which ones of the followings are true in perfectly competitive markets? (a) The industry demand curve is flat. (b) Firms' marginal revenue is constant as quantity varies. (c) From a firm's perspective, its price elasticity of demand is zero. 8. Which ones of the followings are true about firms’ short-run behavior in a perfectly competitive market? (a) Firms shut down whenever profit is negative. (b) Firms...
Please show as much work and explanation as
possible, thank you so much!
10. Which ones of the following statements are true about perfectly competitive markets? (a) The short run supply curve for a firm is upward sloping due to the law of diminishing returns. (b) The industry's short run supply curve is upward sloping due to the law of diminishing returns. (c) The slope of the long run supply curve for an individual firm depends on the industry cost...
Please help! Show all work and label answers clearly please!
Thank you!
2. (12 total points, Suppose a firm can use either Capital (K) or Labor (L) in a production process. The firm's production function is given by Q = 5L + 15K. The price of Capital is $20 per unit and the price of Labor is $8 per unit. a) (4 points) What is the firm's Total Cost function? TC(Q) = b) (8 points) Suppose the firm is producing...
QUESTION 4 The slope of an isocost line shows: the ratio of the marginal revenue product of the inputs. O the ratio of marginal product of the inputs. the marginal rate of technical substitution. the ratio of the input prices. the output elasticity of production. QUESTION 5 If the marginal product per dollar spent on capital is less than the marginal product per dollar spent on labor, then in order to minimize costs the firm should use less capital and...
please explain in detail
1. (10%) (Interlor Solutions) Consider the graph below which shows a firms isoquant for q = 100 and several isOcost lines, where C, < C2< C. Assume the firm is constrained to produce this 100 units and its goal is to minimize costs. к. В E 7-100 C,>C C>C a. Explain why the firm will not employ an input mix of capital and labor at point A. b. Using the last-dollar rule, explain why the firm...
Question 46 2p Which of the following is true of the profit, earned by a monopolist? Profit is maximized along the inelastic portion of the demand curve. Normal profit is ensured where price is equal to average total cost. Normal profit is ensured where marginal cost exceeds average revenue. Economic profit is made where average variable cost equals marginal revenue. Profit is maximized where marginal revenue exceeds marginal cost. Question 47 2 pts A non-price discriminating monopolist's demand curve: is...
Please explain in details with step-by-step solution, Thank you
very much
b) Evren wants to go into the donut business. For $500 per month he can rent a bakery complete with all the equipment he needs to make a dozen different kinds of donuts (K-1, r-500). He must pay unionized donut bakers a monthly salary of $400 each. He projects his monthly production function to be Q 5KL, where Q is tons of donuts. i) With the current level of...
Question 14 1 pts If the price elasticity of supply was calculated as 0.40 for a product and the price increases by 12%, what would happen to the quantity supplied? O Quantity supplied would increase by 8%. O Quantity supplied would increase by 6.3%. O Quantity supplied would increase by 4.8%. Question 15 1 pts As we move along a typical negatively sloping, linear demand curve O the elasticity is constant. it results in elasticity and slope being the same....
Use
first order condition and second order condition
thank you so much
Тип уоu • 7. Perfectly competitive firm faces P(Q) = inverse demand curve and its costs are given by a cost function C(Q), assuming that marginal costs are positive. Firm is also taxed at rate t per unit of output. (a) Write down the firm's profit function. Identify the choice variable, and the parameter if the firm maximizes the profit. (b) Write down the FONC for profit maximization....
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