Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 3, Problem 8P
(a)
To determine
Feasibility of production of the seventh unit of output.
(b)
To determine
The quantity that equates marginal cost and revenue. Also, explain how it maximizes profit.
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Students have asked these similar questions
Suppose the firm achieves total revenue of $1,000 by selling 150 units while facing total costs of $900. If the firm produces and sells 151 units, its total revenue is $1,005, and its total costs are $950. Should the firm produce and sell the extra unit?
Group of answer choices
yes, since marginal profit is positive
yes, since profits are positive
no, since marginal profit is negative
no, since marginal profit is positive
You have recently learned that the company where you work is being sold for $1,000,000. The company's income statement indicates next year's profits of $30,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and the interest rate will remain constant at 7%, at what (constant) rate does the owner believe that profits will grow?
(Hint: the price the owner was willing to pay is the present value of the firm's future cash flows)
Group of answer choices
6%
5%
4%
4.5%
2.1
A manufacturer estimates that its variable cost for manufacturing a given product
is given by the following expression:
C(q) = 25q² + 2000q [$] where C is the total cost and q is the quantity produced
a. Derive an expression for the marginal cost of production
b. Derive expressions for the revenue and the profit when the widgets are sold
at marginal cost.
A firm has a fixed production cost of $4000. For the first 100 units of production, the firm has a marginal cost of $50 per unit produced. Producing more than 100 units has a marginal cost of $70 per unit produced. The firm cannot produce more than 150 units.
How much does it cost to produce at q=0? at q=50? at q=100? at q=125? at q=150?
Graph the firm’s marginal cost function
Chapter 3 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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