Mo increase production from 5 to 6 fire engines because the O True O False dominates in this scenario. True or False: If alternatively Mo's HookNLadder were a competitive firm and $160,000 were the market price for an engine, decreasing its price from $160,000 to $120,000 would result in a decrease in the production quantity, but an increase in total revenue.
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- Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $160,000 to $120,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) ARBS228882R 200 140 2 Demand 5 QUANTITY (Fire engines) $…250 225 Revenue Lost 200 175 150 Revenue Gained 125 Demand 100 75 50 25 3 4 7 8 9. 10 QUANTITY (Fire engines) Gilberto increase production from 7 to 8 fire engines because the dominates in this scenario. True or False: If Gilberto's Fire Engines were a competitive firm instead and $100,000 were the market price for an engine, decreasing its price from $100,000 to $50,000 would result in the same change in the production quantity and, thus, total revenue. O True O False acer Σ 2. 1. PRICE (Thousands of dollars per fire engine)Sean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced five fire engines, but he has decided to increase production to six fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $160,000 to $120,000 per fire engine. Note that while Sean gains revenue from the additional engine he sells, he also loses revenue from the initial five engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. (? 200 180 Demand Revenue Lost 160 * 140 120 Revenue Gained 100 80 60 (Thousands of dollars per fire engine)
- Suppose a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular O other farmers arc likely to plant the same vegetable, pushing up the prevailing market price. O the firm will continue to carn its 'normal profits" far into tho future. O the farm's owners are likely to withdraw from the industry in order to retire carly. other farmers are likely to plant the same vegotablo, pushing down the prevailing market price.The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 10 V ATC The firm will receive $ MR Quantity/time The firm will maximize its profit at a quantity of▼ units. D Options: 6, 8, 9, or 10 After choosing the profit maximizing quantity, the firm will charge a price of in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is How will the situation change over time? Options: 6,8 10, or 24 per unit for this output. O Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. O The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. O This market is already in long-run equilibrium, and will not change throughout time. O Losses will induce firms to leave…The following graph depicts the costs incurred by a Local egg seller, Rahim. Rahim is faced with strong competitors who are selling exactly the same product. Use the graph to answer the following questions- Price/Cost per egg MC 12 ATC MR3 AVC MR2 MR1 Quantity 100 200 300 400 a)lf the market price per egg is 8tk, in order to maximize profit how many eggs does Rahim sell? b)lf the price stays at 8tk, what happens in the long run? choose from the following options. option 1: Rahim stops selling eggs. option 2 : New firms enter into the egg market option 3: all existing sellers suffer from an economic loss. c)lf the price falls down to 3tk price, which of the following option does Rahim have in short run? option1: Temporarily shutting down the business business option 2 : staying in generating no profit option 3: indifferent between staying in and going Out of the market. but
- Don't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?You own Athleticon, which manufactures athletic wear. Your new contract with Atlanta United, a professional soccer team, allows Athleticon to be the sole suppler of athletic wear with the “Atlanta United” logo. No one lese can manufacture athletic wear with the “Atlanta United” logo. What do you think will be Athleticon’s level of profitability on the sale of “Atlanta United” athletic wear? Explain why. Your contract with Atlanta United only lasts 3 years. It was not renewed. Other firms can now manufacture athletic wear with the “Atlanta United” logo It is now 5 years after your contract with Atlanta United was terminated. Any manufacturer that wants to can manufacture and sell athletic wear with the “Atlanta United” logo. What do you think will be the level of profitability and rate of return on manufacturing athletic wear with the “Atlanta United” logo? Explain why.Karim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Karim initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Karim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Karim must lower the price from $60,000 to $40,000 per truck. Notice that Karim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $40,000 rather than $60,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) A 82 8288 289 RO 220 200 100 100 140 120 100 Demand 3 A A A ΔΔ 0 5…
- Kate and Alice are small-town ready-mix concrete duopolints. The market demand tunction is o- 20,000 - 200Pwhere Pis the price of a cubic yard of concrete and Ois the number of cubic yards demanded per year. Marginal cost is sa0 per cubic yard. Suppose Kate onters the market first and chooses her output belore Alice. What is the difference in Alice's profit when Kata enters the market tirst, compared to when they simultanecusly select ther outputa? When Kate entors the markat first, Alice's profit is $3,888.a0 lower. O When Kate enters the market fest, Alice's profit is 513,333.33 lower. O When Kate enters the market first, Alice's profit is $5,000 lower. O When Kate onters the market first, Alice's proft is $1.111.11 higher,Suppose that the market for polos is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Esc 50 PRICE (Dollars per polo) 78°F Sunny 45 40 F1 35 30 25 20 15 10 5 0 + 0 + 2 F2 MC -0- + 4 ATC AVC 6 8 10 12 14 QUANTITY (Thousands of polos) F3 0+ F4 69 16 18 F5 20 a F6 i I F7 4- F8 Q+ H F9 F10 FO F11 F12 Fn Lock InsPrice 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