c. If berries sell for $60 per crate, how many berries should produce?(Hint: must first find minimum AVC - recall two ways to find this learned in Unit 3) Hack
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- Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?Consider the following Table: TC 100 140 90 150 80 160 3 70 170 4 60 180 5 50 190 40 200 30 210 8 20 220 9 10 230 10 240 which contains the demand schedule for a service and the long-run total cost TC of providing it (the cost of producing the quantity zero is a quasi-fixed cost). a. In order to answer the following questions, you may need to calculate variables like ATC, MC, R, etc. Copy and paste the preceding table in the Answers section below, including calculations of the values of all the variables that you will find relevant. b. What quantity will be socially efficient to produce in this industry? How many firms should be in the industry in order to have the efficient quantity produced? Why? What will be the industry's profit if the efficient quantity is to be sold? (Hint: ATC may help to explain this). c. What quantity would you expect that it will be produced in this industry and at what price will be sold if the government does not intervene in order to modify the market…The figure shows a bakery's marginal and average cost curves, and its isoprofit curves. The bakery is a price-taker in a large bread market. Suppose the current market price is P₁. Based on this information, which of the following statements is correct? Price, Cost €6 (5 20 40 60 80 Quantity MC hoprofits AC 100 120 140 160 180 number of loaves Select one or more: a. The bakery would be better off raising its price up to its AC level. O b. The bakery would be minimising its loss at A. Oc. If the bakery is not yet in the market then it would not enter the market. d. If the bakery is already in the market, then it would always immediately exit the market because it is making a loss.
- 1. Micky's auto mechanic shop has a daily total cost represented by: C = 98 + 2q + 2q². Shop's marginal cost is given by: MC = 2 + 4q, where q is the number of repaired cars. a. b. Derive an expression for average cost. Find the quantity range where the shop experientes the economies scale (Hint: scale economy AC index is given by: S = MC). At what production level are scale economies exhausted??A business's marginal cost has a minimum value of $3; its average variable cost has a minimum value of $6; and its average total cost has a minimum value of $7. Given this information, the business should exit at any price below and shut down at any price below Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b с e Question 2 f $3; $6 $6; $3 $7; $6 $6; $7 $3; $7 $7; $3What are the short-run and long-run costs of the production of Walmart?
- Should a firm shut down if its revenues is TR = $1,500 per week and: a. its variable cost is TVC = $1,100 and its sunk fixed cost is TFC = $800? b. its TVC = $1,600 and is TFC = $600? c. its TVC = $1,100 and its TFC = $1000 ($800 of which is avoidable if it shuts down?)In the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while itsaverage variable cost is downward sloping, what can you say about slope of average total cost?Cost LRAC 40 30 20 10 100 200 400 800 Output b. What happened to the cost of one good as the firm increased its output from 100 units to 200 units and from 200 units to 400 units? c. What is the firm experiencing as it increased it scale of operation from 100 units to 400 units? d. What is the firm experiencing if it chooses to produce at point P? Give reason for your answer. e. Which point would be the best point for the firm to produce at? Give reason for your answer.
- Webby Inc. is a web development company. Webby's monthly production function for developing websites is given in the table below. Webby pays $3,000 a month in rent for office space and equipment. It pays each programmer $2,000 a month. There are no other production costs. Fill in the table of production costs. Instructions: Round your answers to the nearest dollar. Programmers Websites 0 1 2 3 4 5 6 0 2 6 12 18 22 24 Variable Cost 2,500 1,167 750 Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal CostPRICE (Dollars per tracker) 30 80 70 60 ATC 20 AVC MC 10 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of trackers per day) In the short run, given a market price equal to $45 per tracker, the firm should produce a daily quantity of trackers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of $ thousand per day for the firm.The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost., now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of $25 each. a. What will be the company’s profits or losses? b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? c. At the given quantity and price, is the marginal unit produced adding to profits?