The last five questions refer to the following diagram, involving the marginal cost (MC) and average total cost (ATC) curves: 6, If market price is $100, how many units will the firm produce to maximize profit?

The last five questions refer to the following diagram, involving the marginal cost (MC) and average total cost (ATC) curves: 6, If market price is $100, how many units will the firm produce to maximize profit?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 41P: Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72...

See similar textbooks

Related questions

Q: 5. The price of trade Suppose that France and Denmark both produce beer and stained glass. France's…

A: The opportunity cost of a choice is the value of the best alternative forgone where, given limited…

Q: Suppose the government reduces the corporate income tax rate. This will increase the return to firms…

A: Corporate income tax is the tax imposed by the government on the profits of the business.

Q: The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC),…

A: Every producer looks to minimize their total cost of production while increase its overall sales…

Q: QUESTION 1 If a factor of production has a fixed total supply, then payments to that factor…

A: The issue you raised has to do with finance and economics' "Time Value of Money" concept. It entails…

Q: Meyer (1995) lists nine threats to internal validity of natural experiments. Describe three.

A: Natural experiments are research investigations that take advantage of spontaneous deviations from…

Q: How do you make people believe that the banking system is safe? In the old days it was often done…

A: The provided question has been answered from the generalized perspective of financial…

Q: In the year 2021, a corporation made $18.2 Million in revenue, $2.4 Million of operating expenses,…

A: The issue you raised has to do with financial analysis and corporate income taxation. In addition to…

Q: According to the figure above, what is the monopolistic competitor's profit-maximizing output? Q3…

A: In economics, monopolistic competition is a kind of market structure that blends aspects of perfect…

Q: 3. Consider a market for a good with the following demand function: Q = 120 - 2p where Qis quantity…

A: A monopoly is a market structure in which there is only one seller of a particular good or service.…

Q: How could sustainable development contribute to economic progress? examine the literature and cite…

A: Sustainable development: Sustainable development is an economic concept that states that resources…

Q: Felix chooses between clothing, 9₁, and food, 9₂. His initial income is $4,000 a month, p₁ = 400,…

A: Consumer preference:It is related to the preference of consumers over a different bundle of goods.…

Q: Because this market is monopolistically competitive, you can tell that it is in long-run equilibrium…

A: Monopolistic competition is a form of imperfect competition. There are a large number of firms.…

Q: Using the below details, answer the following questions. Use interest rate = 10% (must show your…

A: The Life of both the machines is unequal in the given question. In order to make comparison between…

Q: Which of the following shows how the Real Income Effect explains the Law of Demand? OA) As income…

A: The law of demand states that there is an inverse relationship between price and quantity demanded.…

Q: 300 $ 250 200 150 100 50 05. Average Fixed Cost at Q-10 is TC O (a) $90 O (b) $10 O (c) $40 O (d) $9…

A: The cost curve in economics is a function of the total quantity produced in an economy. The firm…

Q: Consider a monopolistic competitive industry with 4 firms producing the same good. The (inverse)…

A: In a Cournot competition model with identical firms, each firm chooses its output to maximize…

Q: The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price.…

A: A tariff is a tax on imported goods.. When a country imports a large proportion of goods from…

Q: Suppose that 1983 is the base year for the Consumer Price Index (CPI) and in 2019 the CPI is 254.…

A: CPI or Consumer Price Index. It is a measure that tracks the average change over time in the prices…

Q: The extent to which a national economy is involved in global trade: is not very strongly related to…

A: Trade:Trade refers to the buying and selling of goods and services in the international market in…

Q: Sean's Fire Engines scenario. O True increase production from eight to nine fire engines because the…

A: Monopoly is a market structure in which there a single seller and the monopolist has the ability to…

Q: Consider an open economy with a current population of 0.55 million people, and where the potential…

A: To determine if there is a gap in the current level of GDP, we need to calculate the actual level of…

Q: The graphs below illustrate an initial equilibrium for some economy. Suppose that the economy…

A: Equilibrium is the condition where demand equates the supply, or in the graph where curves are…

Q: Why do U.S. Treasury bills have lower interest rates than large-denomination negotiable bank CDs? O…

A: Treasury Bills are short-term instruments that are issued at a discount. Treasury Bills are highly…

Q: Click on the icon to read the news cip. Explain and draw a graph to illustrate how a fall in…

A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…

Q: Why is random assignment of participants to control and treatment groups a central feature of lab,…

A: A random experiment is a scientific experiment in which the outcome of the experiment is determined…

Q: profit push inflation bunga ng implasyon

A: Profit-push inflation occurs when businesses raise prices to increase their profits, even if demand…

Q: QUESTION 10 The burden of a tax per unit of output will fall heavily on consumers when demand is…

A: The elasticity of demand is a measure of how responsive the quantity demanded of a good is to a…

Q: An expansionary fiscal policy shifts the aggregate demand curve Select one: a. to the right and is…

A: The postwar period shows how Keynesianism has grown in terms of its ability to alleviate economic…

Q: Machine X has an intial cost of $10,000. It is expected to last 12 years, to cost $200 per year to…

A: The annual cost of owning and sustaining an asset is known as its equivalent annual cost (EAC),…

Q: Which of the following best describes the real interest rate? Select the correct answer below: O the…

A: The nominal interest rate is the interest rate before taking the inflation rate into account. The…

Q: You and your college roommate eat three packages of Ramen noodles each week. After graduation last…

A: ***Since the student has posted multiple questions, the expert is required to solve only the first…

Q: You are given following demand function: Demand function: P=300e−0.2QP=300e^−0.2Q Given equilibrium…

A: Consumer surplus is the difference between the maximum price a consumer is willing to pay and the…

Q: Two students go out to lunch and decide to split the bill evenly between them. Each student has a…

A: To determine whether students eat too much, we need to compare their actual food consumption (fi) to…

Q: Price C 8 4 S 4 $ D₂ Quantity of Submarine Sandwiches 5₂ DI Refer to Figure 4-2. Which movement of…

A: a decrease in quantity demanded is a movement along the demand curve in response to a change in…

Q: 4. If a monopolist could perfectly price-discriminate (L04, LO5) a. the marginal revenue curve and…

A: A monopoly is a market structure in which there is only one seller of a particular good or service.…

Q: suppose the canadian government levies a tax of $ t onevery hour worked .firms are required to pay…

A: Labor market comprises of demand and supply forces working in order to define equilibrium employment…

Q: PRICE 4 Omo Figure 16-8 L M QUANTITY MC ATC Demand MR Refer to Figure 16-8. If this firm were…

A: Monopolistic competition refers to the market organization in which there are many sellers of a…

Q: Decisons for Tomorrow Identify the following policies as either fiscal, monetary, supply-side, or…

A: Aggrеgatе dеmand (AD) and aggrеgatе supply (AS) arе kеy concеpts in macroеconomics. AD rеprеsеnts…

Q: A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y066,…

A: Cost functionf(y) = 0.0358 y0.66where,y = number of unitsf(y) = cost in million of dollars Demand…

Q: Suppose you are the marketing manager for Fruit of the Loom. An individual's inverse demand for…

A: Demand is the quantity of commodity that a consumer is willing and able to buy, at each possible…

Q: iples of Microeconomics Spring20 spring21 Wage rate Idollars per hour 8 2 P 0 40 80 120 160 Quantity…

A: Minimum wage is a legally mandated hourly wage that employers must pay their workers, ensuring that…

Q: Gasoline for cars is produced in a market. There are equations for the Supply and Inverse Demand of…

A: Disclaimer: As per guidelines we are only allowed to solve 1 question. But I have solved 2…

Q: 13. The variety of supply curves The following graph displays four supply curves (HH, II, 3), and…

A: Elasticity is defined as the responsiveness to change in one variable. When changes in price will…

Q: Suppose you'll have an annual nominal income of $40,000 for each of the next three years, and the…

A: To find the real value of 1 USD in the future for given inflation rate, i is given as…

Q: QUESTION 26 A pure monopolist is selling eight units at a price of $20. If the marginal revenue of…

A: A pure monopolist is a single seller with significant market power, able to set prices, faces a…

Q: 8. Rent seeking The following graph shows the demand, marginal revenue, and marginal cost curves for…

A: A monopoly is a market structure where numerous buyers and a single seller of a good coexist. In the…

Q: Use the graph to answer the question that follows. Price level P1 P2 Y2 Y1 Increase in income tax…

A: Any aggregate economic phenomena that results in changes in the value of consumer spending,…

Q: 300 250 200 150 100 50- 07. The minimum Average Variable Cost is O(a) $4 0 Q 0 2 4 6 8 10 12 14 16…

A: Average variable cost can be defined as an average cost at a defined level of production with a…

Q: A basic characteristic of a command system is that: A. Wages paid for labor are higher B. Government…

A: In a command system, also known as a centrally planned economy, the government or a central…

Q: Given the following situations, determine the effect on Qd or D or Qs or S for electric cars. Write…

A: The demand curve demonstrates the relationship between the quantity of a good or service that…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: State the profit maximizing condition for a perfectly competitive firm.

VIEW

Step 2: Explain the answer:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

How does fixed cost affect marginal cost? Why is this relationship important?
Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costs
Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.
100 90 80 70 60 ATC 50 40 30 20 AVC МС О 10 + 0 0 5 10 15 20 30 35 40 45 50 QUANTITY (Thousands of shirts) or each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume hat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing uantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will nake a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Profit or Loss? Produce or Shut Down? Shut down 10 20,000 Loss Shut down 20 10,000 Loss Shut down 32 5,000 Loss Either 0 or 37,500 Shut down 40 Loss 25 COSTS (Dollars)
X 1 ences If the price of oats is $3.0 per kilo, calculate the total revenue and the total profit (or loss) at the quantities shown in below table. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Leave no cells blank - be certain to enter "0" wherever required. Mc Graw Hill Quantity (kilos) Total revenue Total cost Total profit $ 600 1800 $1,900 700 2100 $2,000 $ 800 2400 $2,400
Price and cost (dollars per student) $150 120 88 76 72 ATC 40 - MC MR 24,000 30,000 36,000 Quantity of students enroiled 15,000 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "I think the course should be priced so that the maximum number of students enroll." Which price should this faculty member favor? O A. $0 В. $40 C. $88 D. $150
V See Hint Suppose that Juan sells burritos. The total cost of production, based on the number of burritos produced, is shown in the following table. Number of burritos Total cost ($) 1. 8) 2. 10 3) 13 4. 18 25 34 7. 45 Suppose that the price is $6. Assuming profit maximization, how many burritos will Juan sell? asopdne
Problem 2: Average total cost, from “Principles of Economics” by N. Gregory MankiwYou are the chief financial officer for a firm that sells gaming consoles. Your firm has thefollowing average-total-cost schedule:Quantity | Average total cost600 $300601 $301Your current level of production is 600 consoles, all of which have been sold. Someone calls, desperateto buy one of your consoles. The caller offers you $550 for it. Should you accept the offer? Why or whynot?
2AAWO AC I4 17.1 REVENUE, COST, AND PROFIT APPLICATIONSITSO RSYHAHD 797 20 A firm sells each unit of a product for $50. The total cost of producing x (thousand) units is described by the function C(x) = 10 – 2.5x² + x³ where C(x) is measured in thousands of dollars. (a) Use the marginal approach to determine the profit-maximizing level of output. (6) What is total revenue at this level of output? Total cost? Total profit? 1 The profit function for a firm is -000
1. A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright? 2. Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed cost is$800, of which $600 is avoidable if it shuts down? Explain.
Consider total cost and total revenue given in the following table: TABLE IN IMAGE Calculate profit for each quantity. How much should the firm produce to maximize profit?(ii) Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points betweenwhole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2½.) At what quantitydo these curves cross? How does this relate to your answer to part (a)?(iii) Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in along-run equilibrium? (8.75)
Output AFC AVC ATC MC 1 300 100 400 100 2 150 75 225 50 3 100 70 170 60 4 75 73 148 80 5 60 80 140 110 6 50 90 140 140 7 43 103 146 180 8 38 119 156 230 9 33 138 171 290 10 30 160 190 360 Refer to the chart above. If the market price is $179, the per-unit economic profit at the profit maximizing output is what? 15 23 33 39