55 56 57 P-46 C D 58 11. The Perfect Competition: Cost and Output Determination: Fill the red-colored cells 59 60 -1.Bell Bearings, Inc. feces costs of 61 production as follows. 62 The price of a case of bell bearings is $50, 63 which is given by the competitive market 64 in the short run 65 66 67 68 Tatal in e Fieed Variable .Q Cast Cest O 1 2 3 4 5 G 6 73 CEO decides to shut down operations for a while. 74 What are the firm's profits/losses 100 100 70 100 100 90 100 140 100 200 100 360 0 50 Averope Cest 100.00 50.00 33.33 25.00 20.00 1667 Average Variable Cast 50.00 35.00 30.00 35.00 40.00 60.00 Cest 100 150 170 190 240 300 460 Total Cast 150.00 85.00 63.33 60.00 60.00 76.67 M 69 Nute hot total revenue total amount of money a seller receive for selling a specified ints of goods For a competitive fim, Total Revenue (TR)-Price $500 70 Note that average revenue (AR)overage price, for a compettive fum AR P 71 te that morginal revenue (M)ese in total revenue (18) by selling one more und of output, for a competitive for 72 1.1 Seeing that she can't make a profit, the Marginal Cast from PING dollars 50 20 20 50 60 160 P First you'd better create new columns for total revenue and marginal reven 81 1.3 If you are the firm's CEO, how many cases would you produce in order to maximize profits or minimizes losses? 82 cases 75 dollar Total Profs/Loss Total Revenue- Total Co, where Total Revenue Price = $50q Please, be noted that Fixed cost must be paid even after a factory shuts down for a while. 76 77 1.2 Vaguely remembering his introductory economics course, the CFO tells the CEO it is better to produce 1 case of ball bearings, 78 because marginal revenue (price) equals morginal cost from 0 to 1 case, which is $50. 79 What are the firm's profits/losses at that level of production 80 83 84 1.4 What are the firm's profits or losses at the production level which makes firm's profits maximized or losses minimized? Total Prots/Los Total Revenue- Total Cost, where Total Revenue Price Q 85 86 dollars

Use Figure 11-5 to answer the following question(s). Cost and Revenue In long run equilibrium, this competitive firm will face a price of $6,200 units $10, 250 units $20, 300 units. $16, 300 units. $20 11 71 10 b 6 a Figure 11-5 טן MC MR ATC AVC 200 250 300 Quantity and produce 13

3. The components of marginal revenue Mo's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Mo initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Mo's HookNLadder. As the graph shows, in order to sell the additional fire truck, Mo must lower the price from $105,000 to $90,000 per truck. Notice that Mo gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) Mo Revenue Lost 120 Demand 105 Revenue…

Figure 6.1 MC ATC AVC MR2 MR, 3. 3. 3. 30 40 50 60 Quantity Refer to Figure 6.1. Given MR2, what is total revenue if the firm produces 60 units and the lowest point of the average-total-cost curve is $4? $400 $240 $440 $300 Price