Kali is a dot-com entrepreneur who has established a Web site at which people can design and buy aring Kali pays $600 a month for a Web server and Internet connection. The rings that customers design are made to order by another firm, and Kali pays this firm $20 a ring. Kali has no other costs. The table shows the demand schedule for Kali's rings. What is Kali's profit-maximizing output, price, and economic profit? Price (dollars per ring) Quantity (rings per month) 100 0 80 20 60 40 40 60 20 80 0 100 Kali's profit-maximizing output is rings a month. Kali's profit-maximizing price is $ a ring. Kali's economic profit is $ a month.

Kali is a dot-com entrepreneur who has established a Web site at which people can design and buy aring Kali pays $600 a month for a Web server and Internet connection. The rings that customers design are made to order by another firm, and Kali pays this firm $20 a ring. Kali has no other costs. The table shows the demand schedule for Kali's rings. What is Kali's profit-maximizing output, price, and economic profit? Price (dollars per ring) Quantity (rings per month) 100 0 80 20 60 40 40 60 20 80 0 100 Kali's profit-maximizing output is rings a month. Kali's profit-maximizing price is $ a ring. Kali's economic profit is $ a month.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 19P: Andreas Day Spa began to offer a relaxing aromatherapy treatment. The film asks you how much to...

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Andreas Day Spa began to offer a relaxing aromatherapy treatment. The film asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?
Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.
The diagram above represents a monopolistically competitive firm. Answer the questions below. Is this firm operating in the short-run or long-run? How do you know? Calculate this firm’s accounting profit. From the diagram, what is the productively efficient output for this firm? From the diagram, economies of scale are maximized at which output level? Explain. From the diagram, what is the allocatively efficient output for this firm? Explain.
You decide to create a burger restaurant named BurgerDeals to help pay for college fees. The table below contains total pricing information for your single product, large extra-cheese burger. Your town's burger market is fiercely competitive, with big extra-cheese burger selling for $7 on average. Fill in the blanks in the table and answer the following questions F. How many burgers should you make if you want to optimize your profit?G. If you produce at the profit-maximizing level (or loss-minimizing level), what is theamount of economic profit (or loss) per burger will you make?H. Illustrate graphically BurgerDeals supply curve.
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Andrea’s Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits? Price Quantity TC $25.00 0 $130 $24.00 10 $275 $23.00 20 $435 $22.50 30 $610 $22.00 40 $800 $21.60 50 $1,005 $21.20 60 $1,225
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Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…
You decide to create a burger restaurant named BurgerDeals to help pay for college fees. The table below contains total pricing information for your single product, large extra-cheese burger. Your town's burger market is fiercely competitive, with big extra-cheese burger selling for $7 on average. Fill in the blanks in the table and answer the following question. If you produce at the profit-maximizing level (or loss-minimizing level), what is the amount of economic profit (or loss) per burger will you make?