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- QUESTION 17 Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 Quantityyout References Mailings Review View V Tell me what you want to do.. A A Aa - AaBbCcDc AAB6CCI AaBbCcDc AaBbC AaBbC A - ay - A- 1 Normal Body Text 1 No Spac. Heading 1 Heading Font Paragraph Styles Quesuun z. ATC MC A VC 2.8 10 11 12 Quan tily (per day The graph above shows the cost structure of a perfectly competitive firm. Use the graph above to answer the following questions. a. At which price the firm will earn zero economic profit? b. What is the shut-down price? c. Above what price the firm will earn positive economic profit? d. At what price range the firm will incur a loss? Why would t continue the production? Explain. e. Show the supply curve of the firm on the graph. Explain. ASUS f6 f7 F10 F12 IA prt sc & 24 7 8. 9. 1/2 R T Y 16 5, (sop) a p00 pUD D9:20 Today Вack Edit 9:18 PM 9. You are given the following cost data: TFC TVC 12 1 12 5 12 9. 3 12 14 4 12 20 12 28 12 38 If the price of output is $7, how many units of output will this firm produce? What is the total revenue? What is the total cost? Will the firm operate or shut down in the short run? in the long run? Briefly explain your answers.
- ritaj.birzeit.edu O Final Exam Question 1: Shown below are the graphs of the firm's marginal cost, average variable cost, and average total cost. COST PER UNIT (Cents per bushel) 100 90 80 70 60 50 40 30 20 10 1 2 3 4 5 6 7 8 9 10 QUANTITY OF OUTPUT (Thousands of bushels) A. On the graph, identify each curve.D Question 6 Consider the graph below. Should this firm stay open or shut down in the short run and why? ATC MC ATC* A AVC* pe 10 Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs Shut down because their loss from operating is greater in magnitude than their fixed costs O Shut down because their loss from operating is less in magnitude than their fixed costs B AVC -MR3- Conisder the following graph of a firm in the industry to answer the following: MC, ATC Units of Y A. Is this firm working in a comppitive market or monomply? Exp B. Is it working in short or long run? Explain. C. Does this firm achive economic profits, or losses, or breakeven? Explain.
- 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.This article about the closing of Sports Authority stores provides some rationale for why the chain shut its doors in 2016 rather than continue to operate at a loss. Please read the Consumer Affairs Article and answer the following question. First, identify the fixed and variable costs in this story. Sports Authority closing all stores, liquidating The sprawling chain has abandoned efforts to reorganize James R. Hood Founder and Editor After failing to reach agreement with major lenders, Sports Authority has told a bankruptcy judge that it is abandoning hopes of reorganizing and will instead liquidate its nationwide chain of big-box stores. Sports Authority filed for bankruptcy protection in March and said then that it hoped to trim costs and keep at least some of its stores open. But yesterday, company lawyer Robert Klyman said major debtors were instead pursuing a sale. It's possible one or more major chains will take over some or all of the stores but it's equally likely…Question 5 Consider the graph below. Should this firm stay open or shut down in the short run and why? MC ATC ATC* AVC P* -MR B AVC* 10 O Stay open because their loss from operating is greater in magnitude than their fixed costs Stay open because their loss from operating is less in magnitude than their fixed costs Shut down because their loss from operating is greater in magnitude than their fixed costs Shut down because their loss from operating is less in magnitude than their fixed costs
- Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:a. What is the profit-maximizing level of output? Calculate Apex’s profit.b. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?c. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?d. Comment on your answers to parts (2) and (3Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 QuantityQUESTION 1 DA MC ATC AVC Quantity Observe the graph above. Based on the original price being set at P1, what assumptions would you make about the company's condition and what might happen O The company is profitable and making a very good profit O Company is barely at the break-even point or even below that point because the price of the product is set to cover just its variable costs which means the company would not survive long if the price of P1 remains the same O Company is making small profits in the short run O None of the above.
