Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 4P
To determine
To Determine: The reason for considering the normal profit as a type of cost to the firm.
Concept Introduction:
Normal profit is the minimum return which is necessary to keep the firm running.
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(MANAGERIAL ECONOMICS) Show algebraic solution please
Assume that B = -Q 2 + 4,500Q and C= 2Q 2 are the benefits and costs of increasing the units of X-brand energy drink (in a 500 ml bottle).A. What is the profit function of X-brand energy drink production? B. What is the profit-maximizing value of Q? Solve the problem using a tabular solution, showing the Profit, MB, MC and MNB values; assume Q varies by 50 units (in 500 ml bottle). Highlight the profit maximizing level.
Question:
What are the kinds of cost which firm face in short run. Explain theoretically and graphically the relation of these costs with the output.
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- What is the difference between fixed costs and variable costs?arrow_forwardHow to Determine "Accounting Profit"arrow_forward3-1 Fixed-Cost Fallacy Describe a decision made by your company that involved costs that should have been ignored. Why did your company make the decision? What should it have done? Compute the profit consequences of the change.arrow_forward
- 2. Calculate the values of A, B, C, and D in the following table. Show your calculations. Price Marginal cost Markup on cost Markup on price (%) (%) 6,250 A 5.3 B C 10,000 D 0.0arrow_forward(Minimizing Loss in the Short Run) Explain thedifferent options a firm has for minimizing losses in theshort run.arrow_forwardOutput (unit) Total Cost (RM) Price (RM) 1 550 660 2 670 585 3 720 510 4 740 435 800 360 960 285 1190 210 135 60 8 1520 2160 Table 3 Table 3 shows data for a firm's production and costs in the long run. a. Based on Table 3, compute the marginal cost, average cost, marginal revenue, and average revenue as the output increases from 0 to 9 units. C. Based on your calculation from question (a), show the quantity and price where the equilibrium condition is found.arrow_forward
- HW#4 (Costs of Production, Competitive Markets) Back to Assignment Attempts: Keep the Highest: /5 21. Problems and Applications Q4 Ball Bearings, Inc., faces costs of production as follows: Total Fixed Costs Total Variable Costs Quantity (Dollars) (Dollars) 180 180 80 180 140 3 180 180 180 240 180 320 180 450 Complete the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost Quantity (Dollars) (Dollars) (Dollars) (Dollars) (Dollars)arrow_forwardQuestion 1 Output (Q) Total Fixed Cost (TFC) Total Variable cost (TVC) 0 100 0 1 100 50 2 100 125 3 100 205 4 100 295 5 100 395 Which of the following is true of marginal costs, based on the data in the table above? 1. Marginal costs are rising throughout the output range shown. 2. Marginal costs are falling throughout the output range shown. 3. Marginal costs are constantarrow_forwardWhat is the overhead cost for a company? The profit desired Labor costs The cost of doing business Both a and barrow_forward
- 2) You are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost schedule: Total Cost $300 301 Quantity Average 600 players 601 Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. Should you accept the offer? Why or why not?arrow_forwardOutput (unit) Total Cost (RM) Price (RM) - - 1 550 660 2 670 585 3 720 510 4 740 435 5 800 360 960 285 1190 210 1520 135 2160 60 Table 3 Table 3 shows data for a firm's production and costs in the long run. b. What is the fixed cost of this production? d. Does the firm make a profit or loss? e. Can we consider this is an imperfectly competitive firm? Why?arrow_forwardin which of the following statement is true? (choose one letter only) a. the Marginal Revenue is the approximate revenue from the production and sale of the x+1 unit after x units have been sold.b. the Marginal Cost is the approximate cost of producing the x−1 unit before x units have been produced. c. the Marginal Profit is the profit from the production and sale of the xth unit. d. All of these e. none of the abovearrow_forward
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