If you are a multi-plant firm how do you determine how much product to produce in...
If you are a multi-plant firm how do you determine how much product to produce in each plant if you are to maximize profit?
Homework Answers
Ans. When firms need to determine how much to produce in order to earn maximum profits , they would Produce at a Quantity where the difference between Total Revenue and Total cost is maximum ie Where MR = MC ( Marginal Revenue = Marginal Cost ) . So if a firm would produce at a point where MR = MC , Profits would be maximised.
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If you are a multi-plant firm how do
you determine how much product to produce in...
A) What is the short-run equilibrium price? B) How much output each firm produce in the...
A) What is the short-run equilibrium price?
B) How much output each firm produce in the short-run?
C) In the short-run, how much profit does each firm earn?
D) In the long-run, what do you expect to happen?
E) What is the long-run equilibrium price?
F) What is the long-run profit per firm?
G) In the long-run, how many firms will be in the industry?
Suppose that marginal cost and average total cost for the typical firm in the industry...
b) How much output should the monopolist produce in order to maximize profit? c) How much...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
1) How much output should Sindbad produce to maximize his profit, if the market price is...
1) How much output should
Sindbad produce to maximize his profit, if the market price is
equal
to $11? (2 marks)
2) How much profit (loss) will he earn? (2 marks)
3) Indicate the profit (loss) area on the graph. (2 marks)
4) Find the fixed cost paid by the firm. (2 marks)
5) Suppose Sindbad decides to shut down. What would his loss be? (2
marks)
The following graph represents the situation of Sindbad's caps, a firm selling caps...
Can you explain in detail how you got how much earned per item. Price N ....
Can you explain in detail how you got how much earned per
item.
Price N . MC ATC AVC M 4 4 MR 3 3 MR 2 MK1 1 0 12 13 14 10 16 Quantity Answer questions based on the graph for a perfectly competitive firm. units and earn 1. If market price for product is $4, the firm will produce Jitem or a total profit of units and earn 2. If market price for product is $3, the...
13. In a Bertrand oligopoly a) each firm chooses simultaneously and non-cooperatively how much to b)...
13. In a Bertrand oligopoly a) each firm chooses simultaneously and non-cooperatively how much to b) each firm chooses simultaneously and non-cooperatively its own product's c) one firm acts as a quantity leader, choosing its quantity first, while all other d) each firm makes its profit-maximizing decision while considering the entire produce to maximize its own profit. price to maximize its own profit. firms act as followers, choosing their quantities second and in reaction to the leader. market demand, the...
Suppose that, assuming a firm decides to produce a product, it must build a production facility....
Suppose that, assuming a firm decides to produce a product, it must build a production facility. The fixed cost of this facility is F = 90. Also, the firm has constant marginal cost, MC = 5. Demand for the product that the firm produces is given by P = 40-5Q. a) On a single graph, carefully draw the MC curve, the demand curve, and the ATC curve. Your graph should go up to 8 units of output. Please label your...
You the newly appointed manager of a profit maximizing monopolistically competitive firm. You decided to ensure...
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MC ATC AVC ------- ------- ------- 1 'If the market price is $82, how much will...
MC ATC AVC ------- ------- ------- 1 'If the market price is $82, how much will the firm produce to maximize profit? What is the profit? $50 $150 $50 40 95.00 45.00 30 73.33 40.00 40 65.00 40.00 50 62.00 42.00 60 61.67 45.00 70 62.86 48.57 80 65.00 52.50 90 67.78 56.67 100 71.00 61.00 Click in the profit 8 Q MC ATC AVC ------- ------ ------- If the market price is $52, how much will the firm produce...
Three firms have identical revenue and profit functions. Firm 1 is a private sector firm operated...
Three firms have identical revenue and profit functions. Firm 1 is a private sector firm operated by an owner-manager who wishes to maximize profit. Firm 2 is managed by an revenue-maximizing manager whose pay is proportional to the firm's revenue. Firm 3 is a government-owned firm that has been instructed to maximize the amount of employment, L, subject to the constraint that revenue must not be negative. Each of the three firms has a revenue function R(q)=140−2q^2 and a cost...
Andrea’s Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much...
Andrea’s Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The demand curve for the treatments is given by the first two columns in the following table; its total costs are given in the third column. Answer the following questions accordingly (Q15-Q18). Price Quantity TC $25.00 0 $100 $24.00 10 $250 $23.00 20 $420 $22.00 30 $600 $21.00 40 $780 $20.00 50 $970 $19.00 60 $1,170 15) Total fixed...
A) What is the short-run equilibrium price?
B) How much output each firm produce in the short-run?
C) In the short-run, how much profit does each firm earn?
D) In the long-run, what do you expect to happen?
E) What is the long-run equilibrium price?
F) What is the long-run profit per firm?
G) In the long-run, how many firms will be in the industry?
Suppose that marginal cost and average total cost for the typical firm in the industry...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
1) How much output should
Sindbad produce to maximize his profit, if the market price is
equal
to $11? (2 marks)
2) How much profit (loss) will he earn? (2 marks)
3) Indicate the profit (loss) area on the graph. (2 marks)
4) Find the fixed cost paid by the firm. (2 marks)
5) Suppose Sindbad decides to shut down. What would his loss be? (2
marks)
The following graph represents the situation of Sindbad's caps, a firm selling caps...
Can you explain in detail how you got how much earned per
item.
Price N . MC ATC AVC M 4 4 MR 3 3 MR 2 MK1 1 0 12 13 14 10 16 Quantity Answer questions based on the graph for a perfectly competitive firm. units and earn 1. If market price for product is $4, the firm will produce Jitem or a total profit of units and earn 2. If market price for product is $3, the...
13. In a Bertrand oligopoly a) each firm chooses simultaneously and non-cooperatively how much to b) each firm chooses simultaneously and non-cooperatively its own product's c) one firm acts as a quantity leader, choosing its quantity first, while all other d) each firm makes its profit-maximizing decision while considering the entire produce to maximize its own profit. price to maximize its own profit. firms act as followers, choosing their quantities second and in reaction to the leader. market demand, the...
MC ATC AVC ------- ------- ------- 1 'If the market price is $82, how much will the firm produce to maximize profit? What is the profit? $50 $150 $50 40 95.00 45.00 30 73.33 40.00 40 65.00 40.00 50 62.00 42.00 60 61.67 45.00 70 62.86 48.57 80 65.00 52.50 90 67.78 56.67 100 71.00 61.00 Click in the profit 8 Q MC ATC AVC ------- ------ ------- If the market price is $52, how much will the firm produce...
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