ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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What would you expect to happen to these profit opportunities in the long-run? Hint: you are not the only person/business who can do this same process.
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- Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine…arrow_forwardZero profit does not mean that the entrepreneur does not get anything for his efforts. a. maybe b. true c. both a and b d. falsearrow_forwardOnly typed answerarrow_forward
- Output Total Revenue ($) Total Variable Cost ($) Total Fixed Costs 1 1,000 750 500 2 2,000 1,250 500 3 3,000 2,000 500 4 4,000 3,000 500 5 5,000 4,500 500 What is the slope of the total revenue curve? At about how many computers per day do economic profits seem to be at a maximum? Graph the economic model of this firm.arrow_forward2arrow_forwardXavier opens up a lemonade stand for two hours.He spends $10 for ingredients and sells $60 worth of lemonade.In the same two hours,he could have mowed his neighbor's lawn for $40.Xavier has accounting profit of________and economic profit of ________.a.$50 $10 b.$90 $50 c.$10 $50 d.$50 $90arrow_forward
- Only typed answer and please answer correctlyarrow_forwardThere are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generates profits of $24 for every $300 invested. Instructions: Enter your answers as a whole number. a. What is the percentage rate of return for these 298 dairies? percent b. The other two dairies have a cost structure that generates profits of $22 for every $200 invested. What is their percentage rate of return? percentarrow_forwardTrading at the equality of price and the minimum total average cost indicates that the company is using: 1. The most efficient technology 2. Economic efficiency 3. Allocative efficiency 4. Productive efficiencyarrow_forward
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