Problem 8 (Marginality Principle and Profit Maximization II). Correct the following statement. "If the firm wants to maximize its profit, and if the marginal revenue is larger than the marginal cost at the current production level, then the firm should increase its production."
Q: Prominent Sdn Bhd produces furniture at several factories. Its Seberang Prai factory produces office…
A: The point at which a company's revenues and costs are equal is known as the break-even point. The…
Q: I am in possession of two coins. One is fair so that it lands heads (H) and tails (T) with equal…
A: As the coin is fair the probability of the head and tail coming is half each. However, the weighted…
Q: Consider a simple economy that produces only pens. The following table contains information on the…
A: An inflationary gap estimates the gap between the current level of real GDP and the GDP that would…
Q: For the data given below, what would the naive forecast (with a trend) be for period 5? Period…
A: Naïve Forecast : As per this method the forecasted value for the next period is the actual value of…
Q: Cheapskates is a very minor-league professional hockey team. Its facilities are large enough to…
A: Total Number of fans = 1000 Proportion of blue collar fans = 60% Number of blue collar fans = 600…
Q: Just by having money doesn't make a country rich. It's what the country can produce that makes a…
A: An economy's overall, gradual increase in the prices of goods and services is referred to as…
Q: What is economic diversity among investment?
A: Investment is a key component of aggregate demand (AD). Investment spending is undertaken by…
Q: opic: What is the world going to be like if we continue to have bilateral economic war in the next…
A: It is a common misconception that while the market economy may be tolerated in times of peace, it…
Q: A risk-averse manager is considering a project that will cost £100. There is a 10 percent chance the…
A: Introduction: The expected value is described as the difference between expected profits and…
Q: A good is called "inferior" if: i) There are other goods that consumers prefer to it. ii) Consumers…
A: The kinds of items that people buy depend on their personal income. When people have very high…
Q: As long as the monopolistically competitive firm is able to increase the quantity it produces and…
A: Economies of scale is when the increase in production decreases the cost of production per unit.…
Q: A firm's production function is Q = 6L² - 0.2L³ Where L denotes the size of the workforce. Find the…
A: The marginal product of labor is the increase in output caused by the addition of a new unit of…
Q: The table below shows the marginal cost for three firms to clean up units of pollution. Marginal…
A: Here we are given the marginal cost of cleaning the pollution for 3 firms. Here firms faces choice…
Q: Where do you find poverty in South Africa
A: Check next step for answer
Q: 6. Changes in taxes The following graph plots an aggregate demand curve. Using the graph, shift the…
A: Aggregate Demand: It demonstrates a negative link between the price level and GDP, and hence the…
Q: Drug formularies Help manufacturers determine which drugs are efficacious Help salesmen determine…
A: Drug Formularies are referred to as a list of prescription drugs that are opted for or preferred by…
Q: Consider a buyer and seller of a used car. The quality of the car (denoted as s) is known to the…
A: Given, There are a buyer and Seller of a used carThe quality of the car (given by s) is known to…
Q: Suppose a temporary rise occurs in world demand for domestic products. Using the line drawing tool,…
A: Given:
Q: Suppose that the production function for an economy is given by Y = K1/4L3/4. The depreciation rate…
A: The link between physical output and input is described by the economics concept known as the…
Q: indicators of change in economic activity that move concurrently with business activity is called?
A: There are various types of indicators of economic activity that represent various information about…
Q: Fill in the blanks to make the following statements correct. a. A regional trade agreement, such as…
A: NAFTA refers to North American Free Trade Agreement that was enacted in Jan 1, 1994. It aimed to…
Q: Explain what the impact can be on wages if inflation expectations continue to rise? ▪ The Neo…
A: Inflation generally is an increase in the price level. Expected inflation is the expectation of…
Q: Consider a competitive industry. The demand is Qp(P) = 20-P and the supply is Qs(P) = P (where…
A: Equilibrium in the market occurs at the intersection of the demand and supply curves. Qd = 20 - P…
Q: Which of the following will not shift the supply of labor to the right? Select an answer and submit.…
A: Shift in supply is when there is change in supply without any change in price. For the shift in…
Q: Assume perfect competition: Price: $48 Cost: TC = 5Q + 0.02Q² Solve for the profit-maximizing…
A: For a perfectly competitive corporation to maximise profits, the marginal cost and marginal income…
Q: On the graph below, the consumer begins at L1. The relative prices change to L2. Complete the table…
A: Substitution effect: The decrease in consumption of the good due to price fall of other goods Income…
Q: Which of the following are characteristics the monopolistically competitive firm and the perfectly…
A: In perfect competition , The profit maximization is where P = MC But in monopolistically…
Q: Monopolistic competition is a market struture characterized by Question 1 options: a) many…
A: A monopoly market is the one where exists a single seller. But in monopolistic competition , There…
Q: What factors are responsible for unit product costs that differ from other global markets? Justify…
A: Production is the process of converting inputs into valuable outputs, that have some market value.…
Q: he economy of a country is a three-sector economy. Its public consumption follows the function: C…
A: Given Consumption function: C=400+0.8Yd Investment I=250 trillion Government spending G=IDR 700…
Q: (c) Suppose that investors desire a 10 per cent real rate and expect inflation to gallop to 14 per…
A: Nominal rate includes the effect of inflation. Real rate excludes the effect of inflation.…
Q: : Use an AD–AS graph to illustrate the initial equilibrium and the short-run equilibrium after the…
A:
Q: 3. Consider a two-player, sequential-move game where each player can choose to play right or left.…
A:
Q: 1.Find the firm's demand for inputs (as a function of output and the input prices) 2. Find the cost…
A: Supply function is a numerical portrayal of the association between the amount expected (quantity…
Q: For the production function Q = 16L + 0.2K, returns to scale: O is decreasing can be increasing,…
A: Production function states the relationship between the input and output of goods in production by a…
Q: 4. EncryptCo is a Canadian company considering an international contract with a firm in the nation…
A: Given,
Q: Suppose Matt’s income is $120. He plans to spend it on two goods bread and avacado. Prices are: Pb…
A: The combination of goods and services that a consumer can receive for his or her limited budget is…
Q: If U.S. goods were more desirable in the rest of the world than they used to be, how would NCO and…
A: Net capital outflows (NCOs) is the difference between the acquisition of foreign assets by domestic…
Q: PRICE (Dollars per bike) 500 450 400 350 300 250 - 200 150 100 50 MC 0 0 50 I AC MR Demand 100 150…
A: Monopolistic competition occurs when a large number of small firms produce products that differ only…
Q: 5. PDQ Corporation has a monopoly over the sale of its product in a small southern town. The firm's…
A: Under a monopoly market, the firm maximizes its profit when the marginal revenue is equal to the…
Q: Refer to Figure 3. Under a monopoly, the deadweight loss is a. b. C. d. O $50 $1200 $400 $800
A: A monopolist will produce where MR = MC MR is the marginal revenue MC is the marginal cost. DWL…
Q: Which industry or industries below might operate in a monopolistically competitive market? a. a…
A: Key features of Monopolistic Competition are as follows: There are a large number of buyers and…
Q: Table 3-2 Hours Needed to Make 1 Unit of Number of Units Produced in 20 Hours Pastrami Milk…
A: Opportunity cost is the cost of producing 1 good in terms of other. Comparative advantage is where…
Q: Consider the monopolistically competitive market structure, which has some features of a competitive…
A: Competitive market describes a market where there are many buyers and sellers and where no one buyer…
Q: 1. Which of the following is an example of money as a unit of account? (A) A monthly credit card…
A: Money is a good that acts as a store of value and a means of exchange. Any object that is widely…
Q: Use a diagram to show that the Nash bargaining solution satisfies the independence of irrelevant…
A: To see the if the assumption of irrelevant alternatives hold we take an example with following…
Q: why convex preferences means that "averages are prefrred to extremes"
A: Preferences are the wishes or the choices of the consumers regarding different products and services…
Q: Explain - based on the prerequisites for costless information and asymmetric information - the…
A: The price at which related parties interact with one another, like when supplies or labor are traded…
Q: Suppose Nickelmore Bank has $21100 in assets, and its net worth is $11000. What is the total value…
A: Assets are the resource that will provide future benefit. Liability is the amount that is unpaid…
Q: Tonya, a small business owner is considering taking out a loan from Boomtown Bank to finance a new…
A: Interest rate refers to the rate at which the commercial banks grants loans to the general public.…
Step by step
Solved in 2 steps
- in which of the following statement is true? (choose one letter only) a. the Marginal Revenue is the approximate revenue from the production and sale of the x+1 unit after x units have been sold.b. the Marginal Cost is the approximate cost of producing the x−1 unit before x units have been produced. c. the Marginal Profit is the profit from the production and sale of the xth unit. d. All of these e. none of the aboveGater Tools, a profit-maximizing firm, has a patent on a power tool, making it the only producer of that power tool. Thegraph above shows GaterTools' demand, marginal revenue, average total cost, average variable cost, and marginal costcurves.(a) Calculate GaterTools' total revenue if the firm produces the allocatively efficient quantity. Show your work.(b) Starting at a price of $12, if GaterTools were to increase the price by 4%, will the quantity demanded decrease bymore than 4%, less than 4%, or exactly 4%? Explain.(c) At a quantity of 10 units, is GaterTools' marginal product increasing, decreasing, or constant? Explain. (f) Does GaterTools have a dominant strategy? Explain using numbers from the payoff matrix.(g) Identify the Nash equilibrium. Explain why this is a Nash equilibrium using information from the payoff matrix.(h) Suppose HandyBilt makes a credible commitment to GaterTools that if GaterTools maintains its price, then HandyBiltwill pay GaterTools $250. Will this offer…Table 15-4 Price per Dose $80 72 Quantity Demanded (dose) 0 1 2 3 4 5 6 24 7 16 8 Shakti Inc. has been granted a patent for its Arnica toothache balm. Table 15-4 shows the demand and the total cost schedule for the firm. 64 56 48 40 32 Total Cost of Production (dollars) $80 Refer to Table 15-4. What is the amount of Shakti's profit? $68 $72 $124 $192 82 88 100 124 164 208 268 340
- JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)Use table to find the required values: Price $32 Quantity 400,000 Explicit costs $3,500,000 Implicit costs $4,100,000 (A) Calculate total revenue. (B) Calculate accounting profit. (C) Calculate economic cost. (D) Calculate economic profit.Price, P (dollars per pound) 10 0 QUESTION 5: COST STRUCTURES Feasible set 20,000 40,000 60,000 Quantity of Cheerios, Q (pounds) ● Isoprofit curve: $60,000 ● Isoprofit curve: $34,000 Isoprofit curve: $10,000 Isoprofit curve: $0 Demand curve 80,000 The figure to the left shows the isoprofit curves and demand curve for Cheerios breakfast cereal. Draw a diagram to show how the figure would change in each of the following cases. To make sketching the curves easier, assume the demand curve is linear. In each case, can you say what would happen to the price and the profit? a) A rival company producing a similar brand slashes its prices. b) The cost of producing Apple-Cinnamon Cheerios rises to $3 per pound. c) General Mills introduces a local advertising campaign costing $10,000 per week.
- 1. The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell in order to earn a profit of $10,000 per month. The price of each television set is $300, the average variable cost is $100, and the fixed costs are $5,000 per month. a. What is the required sales volume for Abner Corporation to earn a profit of $10,000 per month? b. If the corporation were to sell each television set at $350 rather than $300, what would be the required sales volume? c. If the price is $350 but the average variable cost decreased to $85 rather than $100, what would be the required sales volume now?Calculate the average total, fixed, and marginal costs for a “competitive” firm with the following production cost schedule. q Total Cost ATC AFC MC0 10 100 12 200 16 300 26 400 38 500 75 600 120 What output or q (in the units of 10) is the most efficient production level? If the market price is $0.10 then what output or q (in the units of 10) is the most profitable production level? (This is the answer im looking for)Help me
- Problem #1: Assume that the following marginal costs exist in catfish production: 17 Quantity Produced (units per day) Marginal Cost (per unit) 10 11 12 13 14 15 16 $4 6 8 10 12 14 16 18 (a) Graph the MC curve. (b) Use the data on market demand below and graph the demand and MR curves on the same graph. Quantity demanded (units per day) 10 Price (per unit) 11 12 13 14 15 16 17 $25 24 23 22 21 20 19 18 (c) At what rate of output is MR = MC?The graph to the right depicts the daily total cost and total revenue curves for a firm. If the firm chooses the profit maximizing level of output, it will earn a profit of $ per day. (Round your answer to the nearest penny.) Revenue and Costs (3) 1,180 1910 624 480 48 91 118 Output (per day) TR a a G50 MC ATC 30 MR 10 10 20 30 40 Quantity (per day) How much profit or loss does the firm make at the selected output level? 40 20 Price and costs (dollars)