---### Deriving the Short-Run Supply CurveConsider the price-taker market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the market.![Graph of Cost Curves]- **X-axis**: Quantity (Thousands of jackets) ranging from 0 to 100.- **Y-axis**: Costs (in dollars), ranging from 0 to 100.Three curves are plotted on this graph:1. **Marginal Cost (MC)**: - This curve is represented in orange. - The MC curve is U-shaped and intersects both the AVC and ATC curves. 2. **Average Total Cost (ATC)**: - This curve is represented in green. - The ATC curve is U-shaped but lies above the AVC curve. 3. **Average Variable Cost (AVC)**: - This curve is represented in purple. - Similar to the ATC curve, the AVC curve is U-shaped but lies below the ATC curve.The graph includes specific data points, annotated with black squares. One notable point is labeled as "30, 15", indicating that at the quantity level of 30 thousand jackets, the cost is $15.This detailed visual representation helps us understand the behavior of cost curves and how they influence a firm's production decisions in the short run. --- ### Homework (Ch 09)For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether the firm will make a profit, suffer a loss, or break even at each price.| Price (Dollars per jacket) | Quantity (Jackets) | Produce or Shut Down? | Profit or Loss? ||---------------------------|--------------------|-----------------------|-----------------|| 15 | 0 | | || 20 | 0 | | || 25 | 0 | | || 55 | 0 | | || 70 | 0 | | || 85 | 0 | | |### Instructions:On the following graph, use the orange points (square symbol) to plot points along the portion of the firm’s short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.)### Graph Description:The graph below presumably shows two axes where:- The horizontal axis (X-axis) represents the quantity of jackets.- The vertical axis (Y-axis) represents the price in dollars per jacket.The orange points (square symbols) will be used to plot the values, signifying the firm's short-run supply curve. The task requires determining by using these points on the graph and then filling out the table based on your analysis.Please refer to the actual graph on your educational tool for precise plotting and further details.

in short run and long run the , the firm should continue the business of not it depends on the…

Consider the price-taker market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the market. 100 90 80 70 60 ATC (Dollar) COSTS 8 8 30 20 10+ 0 O 30, 15 AVC 30 50 60 70 QUANTITY (Thousands of jackets) O MC- 90 100

Consider the price-taker market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the market. 100 90 80 70 60 ATC (Dollar) COSTS 8 8 30 20 10+ 0 O 30, 15 AVC 30 50 60 70 QUANTITY (Thousands of jackets) O MC- 90 100

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Lisa’s Lawn Company (LLC) is a lawn-mowing business in a perfectly competitive market for lawn-mowing services. The following table sets out Lisa’s costs. Quantity (Lawns per hour Total Cost (dollars per lawn) 0 $30 1 40 2 55 3 75 4 100 5 130 6 165 If the market price is $30 per lawn, how many lawns per hour does Lisa’s LLC mow? If the market price is $30 per lawn, what is Lisa’s profit in the short run? If the market price falls to $20 per lawn, how many lawns per hour does Lisa’s LLC mow?
3. Profit maximization using total cost and total revenue curves Suppose Bob runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Bob's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Bob produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 O ☐ ☐ 0 1 2 3 4 5 QUANTITY (Teddy bears) ☐ 6 Total Cost 7 8 O Total Revenue Profit ?
coit ad Fifai oriens diss ܠܫܐ -D. Prufe maximirudcn uni hharat-ade mariet prioris ܗ ܕ Sapietne Sarei nuts a imal haats that manum: a Are a e $$ gar Hat The following graph shows Dames total cost curve Use the blue points (circle symbel) to plot total revenue and the green points (triangle symbol) to plat profft for shirts quanties zero through sever (inclusive) that Darnell produces A< ¥UAnd 10 Tripl ܡܢܐ ܕ ܚ ܠܚܝܬ Total Co ܀ ܀
Calculate Kenji's marginal revenue and marginal cost for the first seven shirts he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. ? 30 8 COSTS AND REVENUE (Dollars per shirt) 25 15 O 10 0 0 1 2 5 QUANTITY (Shirts) 3 4 6 Kenji's profit is maximized when he produces 7 8 would maximize his profit) is $ which is maximizing quantity corresponds to the intersection of the last condition can also be written as Marginal Revenue shirts. When he does this, the marginal cost of the last shirt he produces is $ which is than the price Kenji receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Kenji receives for each shirt he sells. Therefore, Kenji's profit- curves. Because Kenji is a price taker, this Marginal Cost
pshotic 166& 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) Σ 50 PRICE (Dollars per oven)
Discuss economies of scale and how average cost changes as output increases. What pricing strategy should a firm adopt while they are experiencing economies of scale? 250 words please
3
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)
Humana hospitals in 1991 charged very high prices relative to their marginal costs. For example, Humana's Suburban Hospital in Louisville charged patients $103.6 for a pair of crutches that cost the hospital $8.35 (Douglas Frantz, "Congress Probes Hospital Costs-$9 Tylenols, $118 Heat Pads," San Francisco Chronicle, Octob 18, 1991: A2). Calculate the hospital's price/marginal cost ratio, its Lerner Index, and the demand elasticity, e, that it faces for a pair of crutches (assuming that it maximizes its profit). What is Humana's price/marginal cost ratio? The price to marginal cost ratio is. (round your answer to two decimal places) tv 13 DII 80 F2 F3 F4 F5 E1 ! 23 & 1 2 5 7 8. Q W T Y tab S G つ K caps lock V shift fn control option command つエ CI リ
Suppose Eileen runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Eileen's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Eileen produces. 200 175 Total Revenue 150 125 Total Cost Profit 100 50 25 -25 1 3 4 6 7 QUANTITY (Shirts) Calculate Eileen's marginal revenue and marginal cost for the first seven shirts she produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 40 Marginal Revenue Marginal Cost 1. 5 6 7 8 QUANTITY (Shirts) Eileen's profit is maximized when she produces shirts. When she does this, the marginal cost of the last shirt she produces is $ which is v than the price Eileen receives…
Consider the following graph and choose the correct option: MC $18 E АТС AVC 14 12 B - 10 Minimum average variable cost 3 3.5 4 5 Quantity of tomatoes (bushels А None of the answers are correct В The short-run supply curve of this firm is the portion of the MC curve starting at point C The short-run supply curve of this firm is the portion of the MC curve starting at point A The short-run supply curve of this firm is the portion of the MC curve starting at point B
Attempts: Average: 12 5. Profit maximization and shutting down in the short run Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. V ATC AVC PRICE (Dolars per watch) 100 5 MO 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY(Thousands of watches) For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) Price Quantity (Dollars per watch) (Watches) 25.00 40.00 65.00 Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars) (Dollars) 520,000 $20,000 520,000 (Dollars) If the firm shuts down,…