Answered: Given the cost curves of a firm, solve…

Given the cost curves of a firm, solve for the following: a. Given that the restaurant sells 100 of their product at $20.00each, is the firm able to make profit or have a loss?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: The table shows some cost data for Frank's Fortune Cookies which operates in a perfectly competitive…

A: Economic profit, also known as supernormal profit, is a measure of a company's profitability that…

Q: Suppose a firm that produces pints of gourmet ice cream has monthly fixed costs of $12,000. The…

A: The profit is the difference between the total revenue and total cost. The firm earns the positive…

Q: MC $80 ATC $64 $62 $60 AVC $42 $37 80 100 140 200 a The graph above shows the cost curves for…

A: In a market, the profit Maximizing level of output is the one at which market price of a product…

Q: 5. Suppose a firm has the following cost curves, depicted in the graph below. +5 a. Suppose price is…

A: Profit Maximization: The firm will aim to maximize its profits or minimize its losses in the short…

Q: Show that for a proit-maximizing firm producing at its optimal quantity, y, its average total cost…

A: The equilbrium price and quantity of a good sold in a competitive market are determined by the…

Q: Hi. I'm a little confused on how the short run supply curve of a price taking firm is determined. Do…

A: In the perfectly competitive market, the firm is price taker only. It can not influence the market…

Q: In the short-run, if the marginal cost of a firm in a competitive industry is increasing while its…

A: Introduction In the case of a competitive firm, the average total cost will be downward sloping as…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: What is the shutdown condition? a.A condition stating when a firm should cease to operate and…

A: The goal of any firm is to maximize the profits. Profits is the difference between total revenue and…

Q: An increase in a firm's fixed cost will not change the firm's profit-maximizing output in the short…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Use the following information about a perfectly competitive (PC) firm to determine which quantity…

A: There are large number of firms selling identical goods in perfectly competitive market. This makes…

Q: Explain with the help of diagram why a perfectly firm may experience loss or positive economic…

A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…

Q: Can economic profit ever exceed accounting profit? Explain.

A: Profit is the financial gain that a business or an individual earns after deducting all expenses…

Q: We expect the marginal cost to increase as this firm produces more computers. But when the firm…

A: The rise or fall in the cost of producing/providing one more product is referred to as marginal…

Q: For the following, decide whether you agree or dis-agree and explain your answer: a. A firm earning…

A: A perfect competition is the form of market that consist of large number of buyers and sellers,…

Q: Could you explain what is the long run and short run of a firm in a market

A: Production by a firm depends upon the time period. In the short run, the production possibilities of…

Q: Suppose a firm in the short run has Fixed Cost - $100. Its Variable cost - q? where q is the…

A: A firm's motive is to maximize profits by optimal use of inputs. A firm maximizes profit when an…

Q: MC Price ATC 9. AVC 2 10 15 Quantity

A: The short-run is the time period where at least one factor is fixed and others are variable. The…

Q: For each price in the following table, calculate the firm's optimal quantity of units to produce,…

A: When P is $25, Quantity is taken from minimum AVC which is 30,000When P is $70, Quantity is taken…

Q: Evaluate the view that the main goal of firms will always be cost minimization

A: Cost minimization refers to the act of cutting down the cost up to the maximum possible limit.

Q: Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a…

A: Let us calculate the total cost, total revenue, marginal revenue and marginal cost of the shirts…

Q: Suppose a resturant in a city making above normal profit in the short run. How will the market…

A: A restaurant is operating in a monopolistic competitive market structure.

Q: Faced with rising costs , when should a firm choose to shut down , for example in (a)in the short…

A: a) In the short run, there are three possibilities. If price/average revenue > average variable…

Q: What is the shut-down condition? a..A condition stating when a firm should cease to operate and…

A: A firm shuts down and stops producing in the short run, if it can't cover its revenue using its…

Q: PROBLEM #1 The cost function for a typical firm, competing in a perfectly competitive market, is as…

A: Average variable cost (AVC) = Average total cost (ATC) / quantity (q) Marginal cost (MC) =…

Q: Consider the following graph to answer questions 1) Find the total cost when the firm maximizes…

A: 1.The quantity that maximizes the profit which satisfies the condition: Marginal…

Q: Interpret the following statement: “In the Fruit & Vegetable Market in Al-Aweer in thelong run, the…

A: In perfect competition , A firm will produce where P = MC P is the market price MC is the…

Q: The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost…

A: We can see that one of the axis we see the cost and profit is given, the verticle axis.Here, the…

Q: Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the…

A: The provided graph is:

Q: 6. A firm's short-run cost curves for producing gizmos are shown below. MC ATC AVC D=P=MR=AR q1…

A: Constant-cost market is a market where the firms are the price takers and no firm in the industry…

Q: “A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?

A: Economic Cost consists of explicit cost and implicit cost. In other words it consists of sum of…

Q: What does it mean to be operating a firm in the "long run?"

A: "Since you have asked multiple questions, we will only first question for you. If you have any other…

Q: SE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS).…

A: The maximizes profits where the MR= MC. The MC curve cuts the AVC cost curve at its minimum point.…

Q: What is a “price taker” firm?

A: The term “price taker” means who accept the existing market price of its product.

Q: Interpret the following statement: “In the Fruit & Vegetable Market in Al-Aweer in thelong run, the…

A: In perfect competition , There are large no. of buyers and sellers. The firm will produce where P…

Q: Using the Diagram above, answer the following questions: b). Suppose this firm produces 15 units of…

A: Variable cost is the cost that is closely associated with the production activity. That is, it moves…

Q: In perfect competition, if the marginal cost increases which way does the curve shift? what are some…

A: Perfect competition is one of the market structures out of 4 types of market structures in an…

Q: Sketch a marginal cost curve for a firm that has constant marginal costs of production up to its…

A: Marginal Cost: It is the additional cost incurred by producing one more unit of output. It is…

Q: What is the firm’s total variable cost at this level of output? $ e. What is the firm’s…

A: A shutdown stage is a level of functions at which a company experiences no profit for continuing…

Q: Consider a competitive firm selling software; its total cost function is given by (quantities are…

A: Total variable cost is the aggregate amount of all variable costs associated with the cost of goods…

Q: The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: 1. Micky's auto mechanic shop has a daily total cost represented by: C = 98 + 2q + 2q². Shop's…

A: The AC is the average price of goods and services. At the point when we have numerous items to sell…

Q: Which of the following will most likely cause the long-run average cost curve of a fim in a…

A: which of the following is most likely cause the long-run average cost of firm in a constant cost…

Question

Cost per
unit
20
13
10
8
75
100
MC
AVC
ATC
Given the cost curves of a firm, solve for the
following:
a. Given that the restaurant sells 100 of their
product at $20.00each, is the firm able to
make profit or have a loss?
18

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: State the given information:

VIEW

Step 2: Explain the answer:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Define the term "sunk costs" and illustrate with an example. View keyboard shortcuts
Question 2 The market for hand-made bar soaps in Vancouver is perfectly competitive. The marginal cost function for each (identical) firm is given by MC = 2QS + 4. Also suppose the short run cost functions are the same as the long run cost functions. If the market price P is $10. What is the individual firm's MC? a) 8 b)14 c)10 d)12 Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
Question 3 The following graph shows the price, marginal cost, and average cost curves for a firm. MC Price (RM) ATC 40 27 16 12 MR 250 500 570 Quantity (Units)
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. PRICE (Dollars per oven) 100 90 80 70 40 30 20 10 0 0 5 0 MC ATC AVC 10 15 20 25 30 35 QUANTITY (Thousands of ovens) 40 45 50 (?)
Farmer Lee grows strawberries. The average total cost and marginal cost of growing strawberries in the long run for an individual farmer are illustrated in the graph to the right. Suppose the market price is $7.05 per box. If so, then farmers will strawberries until the market price is $ number rounded to two decimal places.) per box. (Enter a numeric the market for a real enter exit Price and cost (dollars per box) 10- 9- 8- 5- 3- 2- 1. 0 MC ATC 10 20 30 40 50 60 70 80 90 100 Quantity of strawberries (boxes per week) o
Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. (?) 50 45 Profit or Loss 40 35 30 АТС 25 20 15 10 AVC MC 4 8 12 16 20 24 28 32 36 40 QUANTITY OF OUTPUT (Shirts) PRICE AND COST (Dollars per shirt)
“That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost curve constitutes the shortrun supply curve for the firm.” Explain using a graph and words.
Given the following Information about a competitive firm's costs, calculate marginal cost and then answer three questions. Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) In front of those numbers. Output (Units) Total Cost Marginal Cost 10 $50 11 52 $ 2 12 56 $ 4 13 62 $ 6 14 70 $ 8 15 80 $ 10 16 92 $ 12 17 106 $ 14 18 122 $ 16 19 140 $ 18 a. If the prevailing market price is $12 per unit, how much should the firm produce? 16 units b. How much profit will it earn at that output rate? 100 c. If the firm Increases output by 1 unit, the firm will make more profit.
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)
You have the following information about long-run total cost for the following firms: Quantity Arnold’s Apples LRATC Belle’s Bananas LRATC Cam’s Cantaloupes LRATC 1 120 33 42 2 140 72 68 3 160 117 98 4 180 168 132 5 200 225 170 6 220 288 212 7 240 357 258 Do any of these firms experience constant returns to scale? How do you know?
Costs MC (per pound) ATC AVC 3.00 2.25 1.50 150 180 225 Quantity (pounds) The figure above shows the cost curves of a perfectly competitive company in the apple market. Use the graph in Figure to answer the following questions. Assume the market price is $3 per pound. a. What is the lowest price at which the apple producer will supply output in the short run? $ per pound. b. What is the firm's profit-maximizing (loss-minimizing) output? c. Is the firm earning a profit or a loss? loss profit