Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 14, Problem 14APA
To determine
The calculation of profit-maximizing output, price, and economic
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Students have asked these similar questions
The figure below shows the demand and costs facing Mike's Bikes, a producer of
mountain bikes. What quantity does the firm produce and what is its price? Calculate
the firm's economic profit or economic loss.
Price and cost (dollars per bike)
400
350
300
250
200
150
100
50
MC
ATC
MR
100
200
Quantity (mountain bikes per week)
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$200 per bike, and economic loss is $10,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$250 per bike, and economic loss is $5,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$200 per bike, and economic profit is $5,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$250 per bike, and economic profit is $5,000.
Next question ice and cost (dolars per par)
The graph shows the long-run situation facing a producer of running shoes.
In the market for running shoes, all the firms face a similar demand curve and have similar cost curves
120-
Draw a vertical arrow that shows the firm's markup at the profi-maximizing quantity. Label R.
MC
t004
What is a fim's markup?
/ATC
A fem'u markup is the amount by which
exceeds
OA price; average total cost
60
OB. price, marginal cost
OC. average total cost marginal revenue
OD. average total cost marginal cost
20-
Describe the market of a firm in perfect competition
MR
O 25 7 100 1is e ths 200 zis
Quantity (pain of shoes per week)
A firm in perfect competition has
OA a markup similar to a firm in monopolistic competition
OB. no markup
> Draw only the objects specfied in the question
Oc. a negative markup
O D. a markkup similar to a monopoly
The graph shows the situation facing Mike's Bikes Inc., a producer of mountain
bikes.
The demand and costs of other mountain bike producers are similar to those of
Mike's Bikes.
Draw a point to show the quantity of mountain bikes that Mike's produces and the
price of a bike.
Draw a shape to show the firm's economic profit or loss. Label it
400
350-
300-
250
200-
150-
100
50-
0+
Price and cost (dollars per bike)
0
MC
ATC
MR
D
50 100 150 200 250 300
Quantity (mountain bikes per week)
>> Draw only the objects specified in the question.
Q
E
Chapter 14 Solutions
Macroeconomics
Ch. 14.1 - Prob. 1RQCh. 14.1 - Prob. 2RQCh. 14.1 - Prob. 3RQCh. 14.2 - Prob. 1RQCh. 14.2 - Prob. 2RQCh. 14.2 - Prob. 3RQCh. 14.2 - Prob. 4RQCh. 14.2 - Prob. 5RQCh. 14.3 - Prob. 1RQCh. 14.3 - Prob. 2RQ
Ch. 14.3 - Prob. 3RQCh. 14.3 - Prob. 4RQCh. 14.3 - Prob. 5RQCh. 14 - Prob. 1SPACh. 14 - Prob. 2SPACh. 14 - Prob. 3SPACh. 14 - a. Do you expect other firms to enter the Web...Ch. 14 - Prob. 5SPACh. 14 - Prob. 6SPACh. 14 - Prob. 7SPACh. 14 - Prob. 8SPACh. 14 - Prob. 9SPACh. 14 - Prob. 10APACh. 14 - Prob. 11APACh. 14 - Prob. 12APACh. 14 - Prob. 13APACh. 14 - Prob. 14APACh. 14 - Prob. 15APACh. 14 - Prob. 16APACh. 14 - Prob. 17APACh. 14 - Prob. 18APACh. 14 - Prob. 19APACh. 14 - Prob. 20APACh. 14 - Womens Golf Clubs A quarter of golfers today are...Ch. 14 - Prob. 22APACh. 14 - Prob. 23APACh. 14 - Prob. 24APACh. 14 - Prob. 25APACh. 14 - Prob. 26APACh. 14 - Prob. 27APACh. 14 - Prob. 28APACh. 14 - Prob. 29APA
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- ion 5 of 20 The accompanying graph depicts the Marginal Cost (MC), Average Cost (AC), Marginal Revenue (MR), and Demand (D) curves for a competitive firm. 20 MC a. Move point E to the profit maximiznig price and quantity on the graph. 18 AC 16 b. What price should this firm charge to maximize profit? 14 12 D= MR 10 Profit-maximizing price: $ 6 4 c. How many units should this firm produce to maximize 2 profit? 2 4 6 8 10 12 14 16 18 20 Quantity Profit-maximizing output: units Price, MR, MC ($)arrow_forwardApex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:a. What is the profit-maximizing level of output? Calculate Apex’s profit.b. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?c. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?d. Comment on your answers to parts (2) and (3arrow_forwardAs fast as you can please! Adrian decides to open a new ready-to-wear skirts brand. While making his study, he noticed that his fixed cost of production is 120 dollars. Following the information.Jacob wants to do a marginal analysis to help him decide if he shall enter the market. a. Define and find the shut-down price and the shut-down quantity for Jacob’s firm Explain the way you identify these two values. b. Find the marginal revenue and determine the quantity that maximizes Jacob’s output? Explain your answer and provide the formula. c. According to your calculations, what is your advice for Jacob? Should he stay or leave the market? Explain your answer. d. Calculate the value of the profit realized by the firm.arrow_forward
- Instructions: For profit/loss, round your answers to two decimal places. If you are entering any negative numbers be sure to include a negative sign () in front of those numbers. A loss should be entered as a negative number. Check my work b. Given a price of $8 per gift box, how many boxes of chocolate should Choco Lovers produce? gift boxes What will the profit or loss be per gift box? 24 per gift box C. Suppose that Choco Lovers raises the price to $10 per gift box. Now how many boxes should Choco Lovers produce? gift boxes What will the new profit or loss be per gift box?arrow_forwardUse the graph below of a perfectly competitive firm to answer these questions and assume that the industry price is $P4 Price P₂ aaaa P₁ MC AVC ATC Q₁Q₂ Q3 Q4 Quantity 1. At an industry price of P4, what is the profit mazimizing level of output and what type of profit/loss is the firm earning 2. If there is a decrease in industry demand causig the industry price to fall to P2, what is the profit maximizing level output, pr position of the firm or is this firm producing in the short run? 3. What industry price represents the long run profit position for the firm?arrow_forwardK Matt's Family Photos is a photographic portrait business in a perfectly competitive market in Duluth. The table shows Matt's total costs. In the long run, what is the price of a portrait and how many portraits does Matt sell an hour? What is Matt's economic profit in the long run? In long-run equilibrium, the price of a portrait is $ >>> Answer to 2 decimal places. In long-run equilibrium, Matt sells portraits an hour. In long-run equilibrium, Matt's economic profit is $ an hour. --- Quantity (portraits per hour) 0 123456 Total cost (dollars per hour) 90 140 170 210 260 320 390arrow_forward
- Q2. a. Create numbers for the table below TC TFC TVC AVC ATC MC 1 4 5 6 7 9 10 b. Indicate a market price that the firm will suffer from loss in the she run? What is the quantity level? What is the TR, TC and profit? Explanation: c. Indicate a market price that the firm will enjoy positive economic profits in the short run? What is the quantity level? What is the TR, TC and profit? Explanation: 2. 3.arrow_forwardBasti’s Coffee operates in a competitive market. The short run price in the coffee market is equal toBasti’s Coffee average variable cost.a. Using two correctly labeled graphs show the coffee market side by side with Basti’s Coffee. Clearlyindicate which graph represents the market and which represents Basti’s Coffee. In your graph identify:i. price and quantity in the coffee market ii. price and quantity for Basti’s Coffee iii. The area of economic profit or loss for Basti’s Coffeeb. In a new set of graphs for both the market and Basti’s Coffee, show the long run adjustments in eachof the following:i. price and quantity in the coffee market ii. price and quantity for Basti’s Coffeearrow_forwardWhat is the long-run market supply curve for hibiscus plants? Graph it.arrow_forward
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