To society, the opportunity cost of producing one more bushel of wheat is A) the marginal cost of the bushel of wheat. B) the average cost of the bushel of wheat. C) the total cost of all of the bushels of wheat. D) the average variable cost of the bushel of wheat
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To society, the
A) the marginal cost of the bushel of wheat.
B) the average cost of the bushel of wheat.
C) the total cost of all of the bushels of wheat.
D) the
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- Assume that the marginal cost curve is given by MC(qi) = 6 + 4qi. And the average variable cost is AVC(qi) = 6 +8qi+ 2qi. (a) Find the shutdown price. (b) If the current market price is $12. What is the optimal quantity produced? (c) What is the optimal quantity produced? If the current market price is $15. What is the optimal quantity produced?A movie theater shows films for a community of 10000 people. Right now, the price per ticket is $17.50. In the past, when they increased or decreased the price per ticket, they discovered that for every dollar (or fraction) that the price was increased or decreased, the attendance decreased or increased proportionally by 200 people. The theater owner pays the Film Distribution Company $10 (incremental cost) in royalties per person whoviews the film. Find a. The willingness to pay distribution of the movie goers. b. The average price they would be willing to pay. c. The price per ticket that maximizes revenue. d. Should the theater owner increase or decrease the price per ticket if she wants to maximize contribution? e. Find the consumer surplus if the tickets are priced at the price that maximizes contribution. Please complete in excel showing formulas on how it was completedWhat is Normal Profit? Normal Profit is equal to the “Reasonable Rate of Return” for the market. Normal Profit is equal to the highest “opportunity cost” available to the producer even if that profit level is above the “Reasonable Rate of Return” for the market Economic Profit is Normal Profit minus what profit would have been at the highest opportunity cost. Economic Profit can be above, below or equal to Normal Profit Both A and C
- A company in the software development sector has a market demand and production costs given by: q = 20 - P CT (q) = q² - 4q (Quantities are expressed in thousands of units). a) Find the optimal price and production. b) Calculate the level of benefits obtained. c) What would be the quantity produced and the price in the long run? Comment on the long- term benefit. d) Graph both situations (a graph for the short run and a graph for the long run).A small farmer produces two types of crops, A and B. A and B generate $30 and $25 per bushel respectively. The crops vary in the mount of resources required to produce them as shown in the table below: Units Available Resource Crop A Crop B Land 60 Water 2 80 Fertilizer 3 60 Labor 1 40 A) What is the maximum profit, and how much of each crop should be produced? B) What allocation of resources will maximize the farmer's profit? C) Use shadow price analysis to determine what additional resources the farmer should seek?A grocery store has limited shelf space. Every produce line generates a yearly profit per square foot of shelf space. As the shelf space devoted to any item is increases, its marginal benefit (i.e., its addition to total yearly profits) goes down. How many square feet should the store owner devote to each item?
- Productive efficiency means output (production) is produced in the long run atMarcy owns a photography business in Mobile, Alabama. The market for photography is very competitive. At Marcy's current production level, her marginal cost is $20 and her marginal revenue is $28. In order to maximize profits, Marcy should decrease the price. decrease production. keep production the same. increase the price. increase production.Bill runs a business that makes custom-printed towels. It will cost him $8 each to purchase and print on towels, and he will have to pay a rent of $1,700 per month for him workshop. Based on market research, Bill estimates that he can sell custom towels for $25 each. a) Calculate the number of towels he needs to sell per month to break-even. towels b) Calculate the break-even in dollars (round off to the nearest cent).
- In the long run, in a competitive economy, companies use resources until the extra or marginal production costs are: 1. Less than the price of the product 2. Greater than the price of the product 3. Equal to the price of the product 4. Equal to your earningsYou run a produce stall at a farmer's market, but rather than sell your own goods, you travel to other farmer's markets, seeking fruits and vegetables you can buy to sell at your stall at the going rates in your market, making a profit in the process. One day, you find the prices to be as follows: Your market Market A Market B Carrots $1.00 per pound $1.25 per pound $0.90 per pound Turnips $1.50 per pound $1.80 per pound $1.60 per pound Oranges $4.00 per pound $3.25 per pound $3.75 per pound You will buy: carrots in market A and market B and turnips in market B. turnips in market B and oranges in market A and market B. turnips in market A and oranges in market B. carrots in market B and oranges in market A and market B.A supply curve shows quantities supplied at various prices. It also shows the A) marginal cost of production. B) marginal benefit of the good. C) total cost of production. D) total profit the firm earns at a given level of output.