(a) Fixed cost = (ATC-AVC)Q = (40.50-30)(240)= $2520.
(b) Profit maximizing condition under perfectly competitive market is P=MC. So, if market price is $30 ,the profit maximizing level of output is 180 units.
(c) Total cost of production at this output level = ATC(Q) = (36)(180)= $6480.
(d) The variable cost at Q=180 is AVC(Q) = (22)(180)= $3960.
(e) Total revenue = (P)(Q)= (30)(180)=$5400
(f) At profit maximizing output level , profit = TR-TC = $(5400-6480)= -$1080 (i.e loss).
(g) Suppose firm's fixed cost rises by $100 ,then ATC would increase.
(f) If P falls to $15 per unit , then firm's profit maximizing level of output is 0 , because P<minimum AVC , so firm would shut down.
The graph below shows the marginal, average variable, and average total cost curves for a perfectly...
The graph below shows the marginal, average variable, and average total cost curves for a pizza seller. Refer to the graph to answer the following questions. Instructions: Indicate the profit-maximizing level of output. Enter your response as a whole number. Cost Curves 3.50 3.25 3.00 2.75 Select Select Select 2.50 (S/slice) 2.00 W 1.75 1.50 1.25 1.00 0.75 0.50 0.25 100 200 300 400 500 600 700 800 900 Q -> Quantity (slices/day) a. What is the amount of the...
Figure 12-4 Price and cost MC ATC AVC $40.50 36.00 30.00 22.00 20.00 -MR 130 180 240 Quantity Figure 12-4 shows the cost and demand curve for a profit-maximizing firm in a perfectly competitive market. 37) Refer to Figure 12-4. If the market price is $30 and if the firm is producing output, what is the amount of its total variable cost? A) $7,200 B) $6,480 C) $5,400 D) $3,960 Figure 15-6 Revenue and cost per unit $30 ATC Demand...
Price/Cost ($) 7) Monopoly II (6 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below. The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market. 501 ATC AVC a. What is the firm's profit-maximizing level of output? Label this on the graph. b. What price will the monopolist charge for that level of output? Label this on the graph....
Consider the competitive market for halogen lamps. 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. For each price in the following table, use the graph to determine the number of lamps this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero lamps and the...
5) Perfect Competition III The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a firm are shown in the figure to the right. The market price is $10. a. What is the firm's profit-maximizing output level? b. Will the firm produce in the short-run? Why or why not? c. If the firm is producing in the short-run, is it earning a profit [yes, no, or N/A]? What is the firm's profit or loss per unit? d. What is the firm's...
3) Monopolistic Competition Long-Run (7 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopolistically competitive firm are shown in the figure below. Price/Cost (S) a. What is the firm's profit-maximizing output level? b. What is its profit-maximizing price? c. What is the firm's economic profit? d. What would the output level be that is productively efficient (minimizes ATC)? e. At what price and output level would this outcome be allocatively efficient? (Hint...
1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q + Q2 MC = 2 + 2Q At the level of output maximizing profit , the above firm's level of economic profit is A) $0 B) $4 C) $6 D) $8 *Additional information after I did the math: The price this firm charges for its product is $10, the level of output maximizing profit is 4...
The top graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for an individual firm in a competitive commercial ridesharing market where the price has stabilized. In the blank graph below it, use the straight-line tool to draw the long-run market supply curve as a line from one edge of the graph to the other.
Suppose the market for apples is perfectly competitive. The short-run average total cost and marginal cost MC of growing apples for an individual grower are illustrated in the figure to the right. Assume that the market price for apples is $34.00 per box. What is the profit-maximizing quantity for apple growers to produce?boxes. Enter your response as an integer.) At this level of output, profit will be Enter your response rounded to the nearest dollar.) Apple growers will earn positive...
Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. At Q=50, the total variable cost is: MC ATC /AVC O A. $1,200 O B. $1,500 O C. $2,100 OD. $2,800 - 100 Figure 8.3