ZuoTi.Pro
Question

XYZ company operates in a perfectly competitive market where the current market price is $10. Currently...

XYZ company operates in a perfectly competitive market where the current market price is $10. Currently the firm is producing 200 units at an average variable cost of $8, an average total cost of $12 and a marginal cost of $10.

What is XYZ’s profit/loss? What is XYZ’s producer surplus?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer

What is XYZ’s profit/loss?

The firm produces at MC=P

where

Q=200 units

Profit=(P-ATC)*Q

=(10-12)*200

=-$400

=loss of $400

the XYZ makes a loss of $400

What is XYZ’s producer surplus?

Producer surplus is the area below the price and above MC and here MC=P so there is no producer surplus

Producer surplus =0

0 0
Add a comment
Know the answer?
Add Answer to:
XYZ company operates in a perfectly competitive market where the current market price is $10. Currently...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • XYZ company operates in a perfectly competitive market where the current market price is $10. Currently...

    XYZ company operates in a perfectly competitive market where the current market price is $10. Currently the firm is producing 200 units at an average variable cost of $8, an average total cost of $12 and a marginal cost of $10. a. Is the situation described above a short-run equilibrium for XYZ? Explain. b. What is XYZ’s profit/loss? c. What is XYZ’s producer surplus? d. Should XYZ continue to produce in this situation? Explain. e. Assuming that XYZ is ‘average’...

  • XYZ company operates in a perfectly competitive market where the current market price is $10. Currently,...

    XYZ company operates in a perfectly competitive market where the current market price is $10. Currently, the firm is producing 200 units at an average variable cost of $8, and average total cost of $12 and a marginal cost of $10. (2) is the situation described above a short-run equilibrium for XYZ? Explain. (2) what is XYZ's profit loss? (2) What is XYZ's producer surplus? (2) Should XYZ continue to purchase in this situation? Explain (2) Assuming that XYZ is...

  • [1] A perfectly competitive aluminum producer is currently producing a quantity where the market price is...

    [1] A perfectly competitive aluminum producer is currently producing a quantity where the market price is $0.67 per pound (i.e., 67 cents per pound), average total cost is $0.70, and average variable cost of $0.60 (which corresponds to the minimum point on the average variable cost curve). Would you recommend this firm expand output, contract output, or shut down in the short-run? Provide a graph to illustrate your answer. [2] Suppose the local crawfish market is perfectly competitive, with the...

  • The market for candy is perfectly competitive, and the current market price of candy is $10....

    The market for candy is perfectly competitive, and the current market price of candy is $10. A particular firm has a short-run marginal cost of production of MC = 0.2q, where q is the number of bicycles produced by the firm. a. If it is optimal for the firm to produce a positive amount of output in the short run, how much should it produce? b. Suppose that the firm has fixed costs of $30, and its average variable cost...

  • Suppose that in a perfectly competitive market, the market price is $10. A firm in that...

    Suppose that in a perfectly competitive market, the market price is $10. A firm in that market has marginal cost of $10, average total cost of $12, and it is producing 100 units. The firm is earning 51.000 in total economic profits and is maximizing economic profits. earning $200 in total economic profits and is maximizing economic profits. incurring $200 in total economic losses and is minimizing economic losses earning zero total economic profits and is not maximizing economic profits

  • Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of...

    Question 31 2.5 pts 31. A firm in a perfectly competitive industry has total revenue of $200,000 per year when producing 1,000 units of output per year. In this case its average revenue is $200 and its marginal revenue is __ zero. also $200 less than $200. O greater than $200 Question 32 2.5 pts 32. In a perfectly competitive industry, the market price of the product is $12.Firm A is producing the output at which average total cost equals...

  • The graph presents the costs and revenue for a perfectly (purely) competitive firm, where the market...

    The graph presents the costs and revenue for a perfectly (purely) competitive firm, where the market price is equal to $600 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the optimal output and profit for this firm. What is the optimal output of this perfectly (purely) competitive firm? (Round your answer to the nearest whole number.) Cost and revenue $2400 2200 2000 1800 Average 1600 total cost Marginal cost Average...

  • The perfectly competitive firm and market in the short run Consider a perfectly competitive market where...

    The perfectly competitive firm and market in the short run Consider a perfectly competitive market where demand is QD = 2,000 - 40P and quantity is measured in units while price is measured in dollars per unit. The long run supply is QS = 100P - 800. a) Find the equilibrium price and the equilibrium quantity. b) When the market is in equilibrium, what is the total expenditure in this market? c) When the market is in equilibrium, what is...

  • The market for fertilizer is perfectly competitive

    The market for fertilizer is perfectly competitive. Firms in the market are producing output, but they are currently making economic losses. a. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? I would think that average total cost and the average variable cost would be greater than the price of fertilizer. The marginal cost would be equal to the price of fertilizer. Is this correct? c....

  • A profit-maximizing firm in a competitive market is currently producing 100 units of output

    A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue so $10, average total cost of $8 and fixed cost of $200. a. what is the profit?b. what is the marginal cost?c. what is its average variable cost?d. is the efficent scale of the firm more than, less than, or equal to 100 units?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT