Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 16, Problem 4SPPA
To determine
To explain:
The profit-maximizing output and price for BR Inc., the price charged by the BR Inc. and whether it is efficient.
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Students have asked these similar questions
a. Graph a purely competitive market showing the point of equilibrium at a price of $150 and a total product of
400,000. b. Next to this graph, graph the purely competitive firm. What price will the firm charge for the product? Will
they charge $150, less than $150, or more than $150? c. Show the demand, average revenue, and marginal revenue
curve on the graph for the firm. d. Show the profit maximizing quantity for the firm at 250 units of output, or tp. e.
Show this firm making a profit of $5,000, making sure to solve for the numerical value for the ATC at the quantity, or tp,
of 250, and showing the profit area on the graph.
EXAMPLE:
Paulo's Ping Pong Balls is a firm that operates in a competitive market. The ping pong balls selI for $3 per package. Fill In the following
table and determine the profit-maximizing level of output:
Total
Cost
Marginal
Revenue
Marginal
Cost
Price
Total
Revenue
Output
Profit
$3
$1.50
1
3
2.00
3
3.00
3
3
4.50
4
6.50
3
9.00
6.
3
12.00
7.
15.50
19.50
6.
24.00
Dana is a dot-com entrepreneur who has established a
Web site at which people can design and buy awatch.
Dana pays $200 a month for a Web server and Internet
connection. The watches that customers design are made
to order by another firm, and Dana pays this firm $60 a
watch. Dana has no other costs.
The table shows the demand schedule for Dana's
watches.
What is Dana's profit-maximizing output, price, and
economic profit?
Dana's profit-maximizing output is
Dana's profit-maximizing price is $
Dana's economic profit is $ a month.
watches a month.
a watch.
Price
(dollars per watch)
100
80
60
40
20
0
Quantity
(watches per month)
0
20
40
60
80
100
Chapter 16 Solutions
Foundations of Economics (8th Edition)
Ch. 16 - Prob. 1SPPACh. 16 - Prob. 2SPPACh. 16 - Prob. 3SPPACh. 16 - Prob. 4SPPACh. 16 - Prob. 5SPPACh. 16 - Prob. 6SPPACh. 16 - Prob. 7SPPACh. 16 - Prob. 8SPPACh. 16 - Prob. 9SPPACh. 16 - Prob. 10SPPA
Ch. 16 - Prob. 11SPPACh. 16 - Prob. 1IAPACh. 16 - Prob. 2IAPACh. 16 - Prob. 3IAPACh. 16 - Prob. 4IAPACh. 16 - Prob. 5IAPACh. 16 - Prob. 6IAPACh. 16 - Prob. 7IAPACh. 16 - Prob. 8IAPACh. 16 - Prob. 9IAPACh. 16 - Prob. 10IAPACh. 16 - Prob. 1MCQCh. 16 - Prob. 2MCQCh. 16 - Prob. 3MCQCh. 16 - Prob. 4MCQCh. 16 - Prob. 5MCQCh. 16 - Prob. 6MCQCh. 16 - Prob. 7MCQ
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