ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- What 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
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- part d is not answered productive inefficiency refers to the extra costs to produce a given amount relative to the lowest cost method of producing that amount. How much of this loss is due to productive inefficiency rather than market power?arrow_forwardConsider the table below that describes the costs associated with producing a good (Q). Q Total Variable Cost Total Cost 0 0 30 1 30 60 2 50 80 3 65 95 4 77 107 5 87 117 6 100 130 7 120 150 8 160 190 9 220 250 10 300 330 What is the value of the marginal cost of producing the second unit? Enter your answer as a number below. Do not include a "$" sign.arrow_forwardMarginal cost is the change in the price of a good for a one unit change in output. fixed cost associated with each unit of output. change in total cost for a one unit change in output. average cost of producing each unit of output.arrow_forward
- is generally determined by the consumer rather than by the producer. In other words, if a customer perceives that he receives more in benefits than what he has to pay for those benefits (or, he gets more in benefits than what he perceives it costs him to acquire those benefits), then he is probably going to be fairly happy with that product in relation to itsS cost.arrow_forward1. A company has the following average income (demand) curve: P=100-0.01Q. Where Q is weekly production and P is price, measured in cents per unit. The company's cost function is given by CT = 50Q + 30,000. Suppose the firm maximizes its profits.a) What is the level of production, the price and the total profit per week?b) The government decides to impose a tax of 10 cents per unit on this product. What would the level of output, price, and profit be as a result of this? CT(Total cost)arrow_forwardA perfectly competitive firm sells its good for $20. If marginal cost is four times the quantity produced, how much does the firm produce? Why? Assuming perfect competition, there is not enough information to determine how much the firm is producing. Assuming perfect competition, the firm is producing where MC is twice MR. If the price is $20, then MC is $40. This means that the firm is producing 10 units. Assuming perfect competition, the firm is producing where MR = MC. If the price is $20 and MC is four times the quantity, it is producing 80 units. Assuming perfect competition, the firm is producing where MR = MC = P. Since price is $20, MR is $20. If MC is 4 times the quantity, it is producing 5 units.arrow_forward
- need help with this math problem, thank you in advance!arrow_forwardJuice producers are price takers since they compete in a highly competitive market. The going rate for juice at the market is $20.00.The prices are provided by: Cost overall = 0.2Q2+8Q+40 Cost Margin = 0.4Q+10 a) Determine how many juices the business should sell to increase earnings. CMg=P b) Determine the highest daily benefits. Total revenue = P*Q Costs in total = 0.2Q2+8Q+40 Total income + maximum perks Total pricearrow_forwardJeb owns a small marketing company, which he operates from a home office. Jeb’s home office is an example of which of the following? Fixed cost Marginal cost Implicit cost Explicit costarrow_forward
- A perfectly competitive market is made up of:Response option group a) Many individuals and companies trading a homogeneous good so they do not affect its price. b) Individuals and companies trading many goods and services. c) Companies organized in a poster. d) Peasants selling fruits and vegetables in the market. e) Companies selling many different products.arrow_forwardQuestion 21 Average fixed cost decreases as quantity increases. True Falsearrow_forwardFind the marginal cost, marginal revenue, and marginal profit functions. C(x) = 7x²; R(x) = x³ + 11x + 15 marginal cost marginal revenue marginal profit Find all values of x for which the marginal profit is zero. Interpret your answer. (Enter your answers as a comma-separated list.) X =arrow_forward
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