ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 8, Problem 3.5P
To determine
Various options available with a firm has for minimizing its losses in the short run.
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(Minimizing Loss in the Short Run) Explain thedifferent options a firm has for minimizing losses in theshort run.
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"XYZ" is a company that produces shoes. if the cost of production of one unit it 12$, Do you believe XYZ selling the shoes at 20$ would be a great strategy?. Explain
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1. What is the marginal rate of technical substitution at each cost minimizing equilibrium point?
2.How many units of labor should the firm use to produce 1,200 units of output at least cost?
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- explain what is happening in this graphsarrow_forwardDiscuss, thank you What does the Law of Supply state? Why do supply and demand curves slope in opposite directions? How is the elasticity of supply affected by the way a product is produced? Explain the difference between a total product and a marginal product. What is the difference between a fixed cost and a variable cost? Note: use references from published scientific articlesarrow_forward(Figure: The Average Total Cost Curve for Shoes) Use Figure: The Average Total Cost Curve for Shoes. The total cost of producing 10 pairs of shoes is approximately: Average total cost of pair of shoes ATC $140 120 100 80 60 40 20 I 0 1 2 3 4 5 6 7 8 9 10 Quantity of shoes (pairs) a) $54. Ob) $131. c) $13. O d) $1,308.arrow_forward
- 6. Exercise 8.6 The Blair Company's three assembly plants are located in California, Georgia, and New Jersey. Previously, the company purchased a major subassembly, which becomes part of the final product, from an outside firm. Blair has decided to manufacture the subassemblies within the company and must now consider whether to rent one centrally located facility (e.g., in Missouri, where all the subassemblies would be manufactured) or to rent three separate facilities, each located near one of the assembly plants, where each facility would manufacture only the subassemblies needed for the nearby assembly plant. A single, centrally located facility, with a production capacity of 18,000 units per year, would have fixed costs of $900,000 per year and a variable cost of $250 per unit. Three separate decentralized facilities, with production capacities of 8,000, 6,000, and 4,000 units per year, would have fixed costs of $475,000, $425,000, and $400,000, respectively, and variable costs…arrow_forward$10 ATC 8 AVC 10 20 30 40 Quantity Using the above graph, calculate the firm's total cost of producing 30 units of output. $8 O $120 $180 $240 The graph is showing you average total cost. The question asks you to use it to calculate total cost. Price 642arrow_forward8. A publisher plans to sell 200,000 copies of textbook in a year. If it costs $3750 to set up a printing, $3 to print a book and $600 to store 1000 books for a year, what size printing runs will minimize the publisher's cost?arrow_forward
- Quantity Produced (Q) 1 2 345 1 2 75 (² Show Transcribed Text 3 Quantity Produced (Q) Average Cost (AC) 100 1. Determine the Total Cost (TC) and Marginal Cost (MC) from the given schedule. 2. Construct the Average Cost (AC) and Marginal Cost (MC) curves based on the information obtained. 3. Illustrate the relationship between AC and MC using the graph and the schedule. 4 60 5 60 70 Quantity Produced (Q) 1 2 345 Average Cost (AC) 100 75 60 60 70 1. Determine the Total Cost (TC) and Marginal Cost (MC) from the given schedule. 2. Construct the Average Cost (AC) and Marginal Cost (MC) curves based on the information obtained. 3. Illustrate the relationship between AC and MC using the graph and the schedule.arrow_forwarda. The following presents the costs and revenues for a firm. (The table is attached) Calculate the marginal cost, marginal revenue and profit for each unit of production. How many units should the firm produce to maximise profit? b. Describe the relationship between the marginal product and the total product of a firm.arrow_forward19.What is meant by zero economic profit? If a firm earns zero economic profit in long run does it violate the profit maximizing behaviour of a firm in long run as if there is no profit then there is no point of production?arrow_forward
- (c) If the rent of the building the firm occupies increases, what will happen to the firm’s profit-maximizing quantity of hats in the short run? Explain.arrow_forward2. Understanding the role of fixed cost in the short run Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers (Dollars per flight) 30,000 10 45,000 20 50,000 30 53,000 40 55,000 50 57,000 58 000 60 00D'Rs 70 58,500 80 59,000 90 59,300 100 59,500 Given the information presented in the previous table, the fixed cost to operate this flight is S At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price Quantity Demanded (Dollars per ticket) (Tickets per flight) 900 700 50 300 70 100 100 Complete the following table by computing total revenue, total cost, variable cost,…arrow_forward
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