c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddiesprofit or loss be per week?d. Now assume the market price is $5.50 per pair, and Buddies produces the profit-maximizing quantity of ear buds. What willBuddies profit or loss be per week?e. Buddies earns a normal profit whenmarginal cost equals average cost.average cost equals average revenue at the minimum of average cost.marginal cost equals marginal revenue at the minimum of marginal cost.marginal cost equals average cost at the minimum of average cost. The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm thatproduces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 perpair.Buddies Production CostsQuantityMCATCof Ear Buds($)($)252.20302.022.17352.452.21403.572.38454.002.56505.462.85555.933.13608.533.58Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places.a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week?pairsb. At the profit-maximizing quantity, what is the total cost of producing ear buds?

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Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 9MC

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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.
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC АТС of Ear Buds ($) ($) 9.00 - 10 2.00 5.50 15 2.44 4.48 20 3.56 4.25 25 4.50 4.30 30 5.02 4.42 35 5.96 4.64 40 8.56 5.13 Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? 2$ d. Now assume the market price is $5.50 per pair, and Buddies produces the…
a lobaster catch is sold by a fisher at $15 per kilogram the lobster fisher has the following total costs at each possible quantity $1500 at 0 kiklograms ,$3200 at 800 kilograms and $12200 at 1000 kilograms a) creat a table with following 10 coloumns :1 ) price 2) quantity 3) total revenue 4) fixed cost 5) variable cost 6) total cost 7) average fixed cost 8) average variable cost 9) average cost and 10) marginal cost .fill in this table based on the information provided in the question b) Draw the fishers marginal revenue ,marginal cost and average cost curves on graph ,plot only the two endpoints at 0 and 1000 kilograms for the marginal revenue curve and plot five points for each of the marginal cost and average cost curves for a total of 12 points (exclude the origin point for both costcurves) remember to plot marginal values such as marginal cost halfway between the two relevant quantities on the horizantal axis c) what is the fishers profit -maximizing or loss -mininmizing quantity…
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A profit - maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $ 200. Complete the following table by indicating the firm's profit, marginal cost, and average variable cost. Profit Marginal Cost Average Variable Cost (Dollars) (Dollars) (Dollars) The efficient scale of the firm must beless than 100 units.
80 60 70 10 MC1 00 60 50 Price and cost (dollars) 40 40 30 20 20 10 0 MC2 Demand 50 100 150 Quantity The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants. How should the firm allocate total output between the two plants in order to maximize profit? Multiple Choice • 10 to plant 1, 40 to plant 2 . 20 to plant 1, 30 to plant 2 . 40 to plant 1, 40 to plant 2 . 20 to plant 1, 60 to plant 2 20 to plant 1, 50 to plant 2 (Ctrl)
Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market. Output Fixed AFC Variable AVC Total ATC MC Cost Cost cost 1 $50 50/1=50 $30 30/1=30 30+50=80 80/1=80 NA 2 $50 50/2=25 $50 50/2=25 50+50=100 100/2=50 (100-80)/(2-1)=20 3 $50 50/3=16.67 $80 80/3=26.67 50+80=130 130/3=43.33 (130-100)/(3-2)=30 4 $50 50/4=12.50 $120 120/4=30 50+120=170 170/4=42.50 (170-130)/(4-3)=40 5 $50 50/5=10 $170 170/5=34 50+170=220 220/5=44 (220-170)/(5-4) =50 What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?