Complete the following table to determine whether Yakov is correct. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 3.00 Given the earlier information, Yakov v correct in his assertion that BYOB should charge $3.00 per can. Suppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. (? 4.00 3.50 Monopoly Outcome 3.00 2.50 Profit 2.00 ATC Loss s 1.50 1.00 0.50 MC D MR 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) PRICE (Dollars per unit)

Complete the following table to determine whether Yakov is correct. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 3.00 Given the earlier information, Yakov v correct in his assertion that BYOB should charge $3.00 per can. Suppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. (? 4.00 3.50 Monopoly Outcome 3.00 2.50 Profit 2.00 ATC Loss s 1.50 1.00 0.50 MC D MR 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) PRICE (Dollars per unit)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Firm X is going to apply a 2nd degree price discrimination. They plan to charge P1 for the first units and P2 for the subsequent units. The inverse market demand curve is P=100 - 0.4q, and the total cost function is TC = 10q + 130. Answer the following questions: 4. the quantities (q1 & q2) the firm is going to sell after applying 2nd price discrimination are: O q1=300 and q2 =150 O q1=75 and q2 =150 O q1=150 and q2 =300 O qt=150 and q2 =75 5. the prices (P1 & P2) the firm is going to charge after applying 2nd price discrimination are: O P1=70 and P2=40 O P1=40 and P2=70 O P1=20 and P2=40 O P1=60 and P2=30
At these levels of output the marginal revenue in the manufactured items market is and the marginal revenue in the semimanufactured raw materials market is . At these prices, the price elasticity of demand in the manufactured items market is and the the price elasticity of demand in the semimanufactured raw materials market is . (Hint: ED=PMR−P��=�MR−�) What are the total profits if the company is effectively able to charge different prices in the two markets? . If the company is required by law to charge the same per-ton rate to all users, the new profit-maximizing level of price and output are per ton and tons respectively. The total profits in this situation is .
lawn-mowing services. Table Q2(a) sets out Lisa's costs and revenue at the market price of RM30 a lawn: Quantity (lawn per hour) Table Q2(a): Costs and Revenues of Lisa’s Lawn Company Marginal Revenue Total Total Cost (RM) Marginal Cost Revenue (RM) (RM) (RM) 30 1 30 30 40 10 60 90 30 30 55 15 3 75 20 4 120 30 100 25 5 150 30 130 30 6. 180 30 165 35 (i) Identify the quantity of lawn per hour that maximised the profit earned by the firm. (ii) Calculate the amount of Lisa's maximum profit in the short run. (iii) In the long run a firm in perfect competition makes normal profit which is equal to zero. Explain graphically how free entry and exit brings the economic profit back to normal profit.
A friend has just started up her own business. Her firm asks you how much to charge for her product to maximize profits. The demand schedule for it is given by the first two columns in the table below; its total costs are given in the third column. For each level of output, you can calculate total revenue, marginal revenue, average cost, and marginal cost. The profit-maximizing level of output can be found at the point where TR - TC is greatest, or where MR = MC, (or the last quantity where MR is still greater than MC.) What is the profit-maximizing level of output for her product? 40 How much will she earn in profits? 80 Price Quantity TC TR? MR? MC? $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
Q2.The management of an ‘Electronic Goods’ manufacturing company asked you to give an advice about changing its current production plan, given the following information:- Annual production plan of computers is 4200 computers.- Total cost of production is OMR 824000.- Fixed cost is OMR 320000.- Revenue function: R = 460.2Q – 0.05Q2 1-Use the above information to formulate the price function and the total cost function, and determine the following: 1) Profit-maximizing quantity.2) Profit-maximizing price.3) Maximum profit value.4) Revenue-maximizing quantity. 2-Should the company change its current annual production plan of computers in order to maximize its profit?
The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space). Quantity Average Cost Total Cost Total Revenue 0 -- 0 $0 1 $15 15 $10 2 $9 18 $20 3 $8 24 $30 4 $8.50 34 $40 5 $9 45 $50 6 $10 60 $60 7 $12 84 $70 The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible? Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…
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BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 3.50 Monopoly Outcome 3.00 2.50 Profit ATC 2.00 Loss 1.50 1.00 MC 0.50 MR 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) Suppose that BYOB charges $2.50 per can. Your friend Dmitri says that since BYOB is a monopoly with market power, it should charge a…