What happens to a competitive firm whose cost function exhibits decreasing marginal cost everywhere? Construct a concrete cost function of this type and carry out the search for the profit-maximizing output
Q: Why is economic cost known as opportunity cost? What are included in economic costs?
A: Opportunity cost refers to the cost of a foregone opportunity. The cost involved when an opportunity…
Q: Considering how monetary policy affects the market, which of the following statements is most…
A: In order to analyze economic projections and effectively communicate with the public, central banks…
Q: In the Mundell-Fleming model for a small open economy with flexible exchange rates, if the economy…
A: Exchange Rate: The rate at which one country's currency can be exchanged for another's. It…
Q: Which of the following is true regarding different types of inflation? Cost-push inflation is…
A: Cost-push inflation: An inflation type driven by increased production costs, leading to higher…
Q: If you are able to save $4400 in year 1, and amounts increase by 2.6% each year through year 19 at…
A: Saving in the first year is $4400The annual increment rate in savings is 2.6%. Saving is made up to…
Q: a. If the present price level is 100, the growth rate of real GDP is b. If the present price level…
A: The real economic growth is the overall growth of productivity after the inflation rate is adjusted.…
Q: For the cash flows shown, determine the incremental cash flow between machines B and A for (a) year…
A: The amount of money that a new project, product, investment, or campaign adds to or deducts from…
Q: What is the equilibrium prices?
A: Equilibrium in the economy is considered as the state of rest for the economy. It is the point from…
Q: Because advertising costs money, it can give: firms with unique products a cost advantage.…
A: This can be described as a form of market in which no single producer or consumer has the power to…
Q: Your insured has Comprehensive coverage on O.A.P. 1 Owner's Policy and informs you that he/she will…
A: Comprehensive Coverage: This is an element of an auto insurance policy that provides coverage for a…
Q: You are given the PPF below for Macroville. The economy currently operates at point A with an…
A: The Production Possibility Frontier (PPF) represents the various combinations of output that an…
Q: Suppose an increase in population increases the demand for automobile repairs in New Haven County's…
A: In a perfectly competitive market for auto repair services in New Haven County, the dynamics of…
Q: Question no. 4 a) By using the expected utility concept define risk averse, risk lover and risk…
A: The expected utility concept is used to describe how individuals make decisions under uncertainty by…
Q: An advantage of monetary policy over fiscal policy is: Select one: O a. the decision makers are…
A: Monetary policy refers to the actions taken by a country’s central bank or monetary authority to…
Q: What is a tariff? • A limit imposed on the production or sale of a product. • A maximum or minimum…
A: A tariff is a type of tax or duty imposed by the regulatory body on goods and services that are…
Q: Equation for consumption is C=40/(0.8Y) where Y= yearly income = $400. A) what is the level of…
A: The average propensity to consume refers to the income proportion that is used by an individual to…
Q: The unemployment rate O uses a definition of unemployment that places attention on the serious cases…
A: The unemployment rate is a key economic indicator that measures the percentage of the labor force…
Q: In general, foreign entities: a. are borrowers of domestic (U.S.) loanable funds.…
A: U.S. portfolio investments is bought by lenders due to the highly developed, liquid, and efficient…
Q: What do the dots in this scatter diagram show? The dots in this scatter diagram show that as the…
A: A scatter diagram, also known as a scatter plot or scatter graph, is a graphical representation of…
Q: In Example 2.8, we discussed the recent increase in world demand for copper, due in part to China's…
A: Demand shows the relation between P and Q that consumers are willing to buy, assuming all other…
Q: PRICE (Dollars per unit) X 360 180 38- 0 Between Y and Z W True 25 False X For each of the regions,…
A: Price Elasticity of Supply measures the percentage change in quantity supplied of a good or service…
Q: Two incinerators are being considered by a waste management company. Design A has an initial cost of…
A: The concept known as capitalized cost entails considering the overall expense associated with an…
Q: Refer to the cash flow diagram. What is the present worth, P, of the gradient cash flows? 600 500 „Ï…
A: Cashflow represents the flow of the money during the year or in other words, it represents the…
Q: An IAC (industrially advanced country) had a per capita income of $44,000, while a DVC (developing…
A: Per capita income is the total income divided by country's population.It is an important economic…
Q: Fresno County, California is the largest agricultural producing county in the country and almonds…
A: Profit Margin:profit margin represents the percentage of revenue (or profit) a company retains as…
Q: The market produces too much of a good with O adverse selection negative externalities positive…
A: Efficiency means when allocation of goods is utilized in best way and it means no social welfare…
Q: The following graph shows the supply of and demand for capital in a market over the last year. You…
A: The demand and supply of capital determines the equilibrium interest rate in the capital market.…
Q: A local builder offers to place with you insurance on every house he/she builds while is under…
A: DISCLAIMER “Since you have asked multiple questions, we will solve the first question for you. If…
Q: As output increases along the short-run aggregate supply curve, briefly explain what happens to the…
A: Aggregate supply refers to the total quantity of a goods or services that an economy produces in a…
Q: Imagine that you are managing a small firm and thinking about entering the market of a monopolist.…
A: Monopolist: A monopolist is a market structure in which a single firm or entity is the sole provider…
Q: H G O B 50 100 150 200 250 Quantity (units) Look at Figure 4.5.3. If If quantity is 200, deadweight…
A: In economics deadweight loss is associated with the market inefficiency that arises when supply and…
Q: What are the goals of monetary policy? maximum employment and stable prices zero unemployment and…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 100 Cumulative Percentage of Income 8 80 60 20 0 Line of Perfect Income Equality Lorenz Curve 1…
A: A graphic depiction of income or wealth distribution is the Lorenz Curve. It demonstrates the…
Q: factor 2 is $12, in what proportions should the firm use factors 1 and 2 if it wants to maximize…
A: Production function exhibits the relationship between the inputs and the output. Profit is the…
Q: A group has chartered a bus to New York City. The driver costs $150, the bus costs $550, and tolls…
A: Economics is a social science that studies how individuals, businesses, governments, and societies…
Q: Exercise 2 A firm has the single-input production function q(L) = 12L² - 21³. a) What is the average…
A: The production function shows the relationship with the input used and output produced. Average…
Q: Your client has a $200,000 Homeowners Comprehensive policy. Due to a fire which causes substantial…
A: The Homeowners Comprehensive policy typically includes a provision for Additional Living Expenses…
Q: 4 3 15 21 10 15 12 16 Refer to the above table. If the price of a hamburger increases from $4 to $5,…
A: The demand schedule represents negative relation between the price and quantity demanded.The market…
Q: Consider the production function F (K, N) = KN. Which statement is correct? O The production…
A: The production function shows the relationship with the input used and output produced.There is…
Q: (15) What is the minimum price needed by the firm to break even (i.e., earn zero economic profits)?…
A: Total cost is the sum of fixed costs and variable costs. Fixed costs are the total obligations of…
Q: Suppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross…
A: The Gross domestic product is a country's final value of goods and services calculated for a year.…
Q: A South American country has had a high rate of inflation. Recently, its exchange rate was 15 lunas…
A: The exchange rate indicates the price of a currency in terms of a foreign country's currency. At…
Q: Mary has income of $2000 today and $1000 tomorrow. She can lend and borrow at an interest rate of…
A: Intertemporal Consumption Choice Decision: This is an example of the Intertemporal Consumption…
Q: A monopolist serves market A with an inverse demand curve of P = 12 – Q. The marginal cost is…
A: In a monopoly market structure, There exists a single seller. There exists high barriers to entry…
Q: How does the graph you've just explored show the equivalence of a tariff and an import quota? The…
A: A tariff is essentially a fees that is placed on the price of the good.A quota is a limit to the…
Q: The bimatrix represents a simultaneous move game between Rowena and Colin. Rowena's payoff is the…
A: Nash equilibrium is a situation where no player has an incentive to deviate from the strategy of…
Q: What is the IRR for an investment of $X that returns $Y at the end of each year for Nyears?…
A: Initial investment (X) = $11,040Annual return is (Y) = $992.25Number of years (N) =41 years.The…
Q: Suppose a closed economy with no government spending or taxing initially. Suppose also that intended…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. This…
Q: Ginny sells bottled water from a small stand by the beach. On the last day of summer vacation, many…
A: Ginny and Eric are selling water on the beach.If they both work hard, they can earn a total of $270…
Q: Economic profits may result from: O a. innovation O b.risk taking O c. exploiting market…
A: Profit is the financial addition or advantage that a business or individual acknowledges when the…
What happens to a competitive firm whose cost function exhibits decreasing marginal cost everywhere? Construct a concrete cost function of this type and carry out the search for the profit-maximizing output.
Step by step
Solved in 3 steps with 2 images
- Draw the cost curve of the typical firm and identify its profit maximizing rate of output and its total profitsThe graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5At what output rate does the firm maximize profit or minimize loss?
- A firm has a fixed production cost of $4000. For the first 100 units of production, the firm has a marginal cost of $50 per unit produced. Producing more than 100 units has a marginal cost of $70 per unit produced. The firm cannot produce more than 150 units. How much does it cost to produce at q=0? at q=50? at q=100? at q=125? at q=150? Graph the firm’s marginal cost functionSuppose that the manager of a firm operating in a competitive market has estimated the firm's average variable cost function to be - 0.03Q + 0.00005Q² AVC = 10 – Total fixed cost is $600. a. What is the corresponding marginal cost function? b. At what output is AVC at its minimum? c. What is the minimum value for AVC?The cost function for Acme Laundry is C(q) = 50 + 30q +q?, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p? The output level at which the firm's profit is maximized as a function of p is q =|- (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the / character.) If p= 60, then Acme Laundry should produce| units. (Enter your response as a whole number.)
- Would a cost function of 0 mean a linear line of supply curve? For example if 10 firms are on the market selling 10 goods and the cost function is 0?A company is producing a product using capital with the production function f(K) satisfying f'(K) > 0 and ƒ"(K) < 0 for all K. The profit function is given by π = pf (K) - K where p is the price of the product. a) Find the expression for profit-maximizing K*. How does the K* change when p increases? Briefly, up to 50 words, discuss the economic intuition.Let's consider a company that produces a good Z, in a perfectly competitive market. The expression for the total cost of this undertaking is as follows: C( q) = 72 + 2q2 Graph the marginal cost, average cost, and average variable cost curves of this company. Your chart should be accurate. Also include the break - even point (SR) and closing point (SF).
- Given the information from the graph below, draw the cost curve of the firm showing the minimum costs corresponding to the level of output.In the short-run, if the marginal cost of a firm in a competitive industry is increasing while its average variable cost is downward sloping, what can you say about slope of average total cost?Why should a firm shut down if its average variable cost curve is above the price of their product?
