Economics Today (19th Edition)
19th Edition
ISBN: 9780134478777
Author: Roger LeRoy Miller
Publisher: PEARSON
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Textbook Question
Chapter 23, Problem 5P
Consider the information provided in Problem 23-4 Suppose the market price drops to only 55 per pizza. In the short run, should this pizza shop continue to make pizzas, or will it maximize its economic profits (that is, minimize its economic loss) by shutting down?
23-4. The table nearby represents the hourly output and cost structure for a local pizza shop. The market is
| Total Hourty Output and Sales Pizzas | Total Hourty Variable Cost ($) |
| 0 | 5 |
| 1 | 9 |
| 2 | 11 |
| 3 | 12 |
| 4 | 14 |
| 5 | 18 |
| 6 | 24 |
| 7 | 32 |
| 8 | 42 |
| 9 | 54 |
| 10 | 68 |
- Calculate the total revenue and total economic profit for this pizza shop at each rate of output
- Assuming that the pizza shop always produces and sells at least one pizza per hour, does this appear to be a situation of short-run or long-run equilibrium?
- Calculate the pizza shop's marginal cost and marginal revenue at each rate of output Based on marginal analysis, what is the profit- maximizing rate of output for the pizza shop?
- Draw a diagram depicting the short-run marginal revenue and marginal cost
curves for this pizza shop, and illustrate the determination of its profit-maximizing output rate.
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A gizmo producer operates in a perfectly competitive market with a price of $100 for a can of gizmos.
The gizmo producer has a marginal cost curve equal to 0.52q, where q is the number of cans of
gizmos produced. The gizmo producer currently produces 192 cans of gizmos. Should the gizmo
producer produce 193 cans of gizmos instead?
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cost of 3rd box is above it, so profit is already maximized.
None of these answers.
Yes, the marginal cost of the 192nd box is below marginal revenue, so production is
too low, and profits are not maximized.
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Chapter 23 Solutions
Economics Today (19th Edition)
Ch. 23 - Prob. 23.1LOCh. 23 - Prob. 23.2LOCh. 23 - Prob. 23.3LOCh. 23 - Prob. 23.4LOCh. 23 - Prob. 23.5LOCh. 23 - Prob. aFCTCh. 23 - Prob. bFCTCh. 23 - Prob. cFCTCh. 23 - Prob. 1CTQCh. 23 - Prob. 2CTQ
Ch. 23 - Prob. 1FCTCh. 23 - Prob. 2FCTCh. 23 - Prob. 1PCh. 23 - Prob. 2PCh. 23 - Prob. 3PCh. 23 - Prob. 4PCh. 23 - Consider the information provided in Problem 23-4...Ch. 23 - Prob. 6PCh. 23 - Prob. 7PCh. 23 - Prob. 8PCh. 23 - Prob. 9PCh. 23 - Prob. 10PCh. 23 - Prob. 11PCh. 23 - Prob. 12PCh. 23 - Prob. 13PCh. 23 - Prob. 14PCh. 23 - Prob. 15PCh. 23 - Prob. 16PCh. 23 - Prob. 17PCh. 23 - Prob. 18P
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