Carefully explain the condition that the firm should follow if it wishes to produce at least cost in the long run.
Carefully explain the condition that the firm should follow if it wishes to produce at least...
Question 2: Consider a firm in a perfectly competitive market that should produce a positive quantity in the short-run, but is still earning a loss. A.) Draw the cost curves (ATC, AVC, MC, MR) for the firm. Clearly label the quantity this firm would produce. Label the loss the firm would incur. B.) Briefly explain why the MR looks the way it does and why you placed it where you did on your diagram. (How do we determine MR for...
A firm wishes to produce Q = 150 as cheaply as possible using only labor (L) and capital (K) with a relationship explained by the following production technology: Q = 15L + 25K. The prevailing market wage is $w/hr. You will need to work carefully to determine the wage rate but know that the rental rate of capital, r = 50. 1. Find w so that the firm can optimally employ 5 workers and 3 units of capital to produce...
With no government intervention, what price will the firm
charge? Carefully follow all numeric instructions; enter only a
number.
* --T- -- 120 150 Quantity With no government intervention, what price will the firm charge? Carefully follow all numeris instructions: enter only a number 50
4. Suppose that a firm has two plants with the following cost functions: MC1 = 5+2q1 MC2 = 40+q2 Fixed costs are 40 for each plant. a. Suppose price is 60. How much should this firm produce in each plant? b. Suppose the firm wishes to produce 25 units. How much should it produce in each plant? c. Repeat b. under the assumption that the firm wishes to produce 15 units. Check your answer carefully.
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4) Explain why a firm should continue to operate in the short run so long as market price is greater the firm's average variable cost at the profit-maximizing level of output.
Question 19 In the short run, the firm should continue to produce if and only if Price exceeds average fixed cost. Price exceeds average variable cost. Price exceeds average total cost. Price exceeds marginal cost. Marginal revenue equals marginal cost. • Previous
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
5. (20 points) An entrepreneur purchases two factories to produce frisbees. Each factory produces identical products, and each has a production function given by: he factories differ, however, in the amount of capital equipment each has. Factory 1 has K1-25 and factory 2 has K2 -100. The wage rate and the rental rate for capital are givern If the entrepreneur wishes to minimize short-run total costs of frisbee production, how should output be allocated between the two factories? Please explain...
QUESTION 3 [20 Marks 1. Figure 1 illustrates the short-run profit/loss condition of a typical firm in a given market. Figure 1 MC ATC AVC 245 210 175 129 (a) Calculate the firm's total profit/loss. (b) Should this firm shut down in the short-run? Provide a reason for your answer. (c) What is this firm's shut-down price? d) What type of market stuctur is epreete tby igure 1? Consider the graph below, which indicates the demand and cost structures of...
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...