ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose Mr. Mohammed, a seller in the Fruit & Vegetable Market in Al-Aweer, suddenly
realized that his marginal cost was below the market
if he were a profit maximizer? Analyze.
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- You are one of 5 identical firms (i. e., you all have the same costs) that sell widgets. Each day you have a fixed cost of $9 to operate. The marginal cost of your first widget is $1; second is $2; third $3; fourth $7; and for the fifth it is $8. You have a capacity constraint of 5, and you can only produce a whole number of widgets. Part 2 The AVC for a firm that produces 2 widgets is $ enter your response here. (Round your answer to 2 decimal places as needed)arrow_forwardollingOnelED.. App Inventor Tic Ta... Calendly-Kathryn.. eaaesID JO Ə V Diane owns a store that sells computers. Her profit, in dollars, is represented by the function P(x) = x - 22x2 - 240x, where x is the number of computers sold. Part A: Diane hopes to make a profit of at least $10,000 by the time she sells 36 computers. Explain whether or not Diane will meet her goal. Justify your reasoning. Part B: Diane states that there are three possible values of x for which she will have a profit of$0. Find the values of x that produce a zero profit to show whether Diane is correct or not. Justify your reasoning.arrow_forwardSuppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 80 Profit or Loss 70 ATC 60 50 40 20 AVC 20 MC 10 10 12 QUANT TY Thousands of pans per dey 140 45 32 PRICE (Dollars per pan) 品 导arrow_forward
- Suppose Mr. Mohammed, a seller in the Fruit & Vegetable Market in Al-Aweer, suddenlyrealized that his marginal cost was above the market price of the output. How would he reactif he were a profit maximizer? Analyze.arrow_forwardProfit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…arrow_forwardFor the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.50 per slice?Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Instructions: Enter your response as a whole number. If you are entering a negative number, be sure to include a negative sign (−). When the price is $1.50 per slice, the profit-maximizing level of output is slices per day. Instructions: Enter your response rounded to the nearest penny (two decimal places). At the profit-maximizing level of output, the producer's profit is: $ per day.arrow_forward
- How do you calculate whether your business has an economic profit using marginal approach to profit maximization? and what does an economic profit means?arrow_forwardno need for the graph could you just answer each scenario in 3 terms: optimal prize , optimal quantity and profitarrow_forwardCan you explain the ( Compare the values ) part and how Q = 6.5 is profit maximized?arrow_forward
- If the average total cost of producing a good rises as a firm produces more of the good, then which of the following must be TRUE? O ATC < MC AVC is increasing. AVC < MC. O All of these. If v ases omies er Click Save and Submit to save and submit. Click Save All Answers to save all answers.arrow_forward1. Suppose you are the owner of a burger restaurant that has a cost of production given by C = 400 + 0.02q^2 where q is the number of burgers produced per day. Assume that the market for burgers is perfectly competitive. a. If the market price for a burger is $10, how many burgers should the manager plan to produce in a day? b. What is the profit level? Is this the maximum profit that the restaurant can make per day? c. What output will the firm produce if the price of a burger goes down to $8?arrow_forwardWhat are transaction costs? How do transaction costs affect the boundaries of a firm?arrow_forward
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