Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 8, Problem 13SQ
To determine
The economic profit for the firm at output of 200 units per week.
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Students have asked these similar questions
i. Calculate the marginal cost, marginal revenue and profit for each unit of production.
ii. How many units should the firm produce to maximise profit?
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Problem 1. Fill out the missing data.
Quantity
Total Cost
Marginal Cost
Fixed Cost
Variable Cost
Average Total Cost
-
Average Variable Cost
7
10
37
22.5
10.50
15
The market price for the firm's output is $14.50.
a) What quantity will the firm produce?
Q =
b) What is the firm's profit?
Profit=
P =
P =
c) What is the breakeven price?
d) What is the shutdown price?
f) Are consumers or producers affected by the tax more? Explain.
(1) Use the graph to answer the question below. The quantity is measured in thousands of units.
What will this firm decide to do in the long run?
A-It will stay in the market because the price is above its AVC at its profit-maximizing output.
B-It will leave the market because the price is below its ATC at its profit-maximizing output.
C-It will increase its price to point B to earn normal profit.
D-It will increase its output until its profit-maximizing output level is equal to B.
E-Insufficient data to determine.
(2) A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do?
A-Produce more milk. B-Produce less milk. C-Shut down in the short run. D-Operate in the short run and leave the industry in the long run. E-Insufficient information to determine
(3) A firm operating in a perfectly competitive market cannot…
Chapter 8 Solutions
Micro Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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Similar questions
- Currently the firm is producing at a profit maximizing quantity of output and has a total revenue of $5000. Variable costs are $4000 and Fixed costs are $2000. Which of the following is true for this firm in the short run: A. The firm should continue producing at a loss B. The firm should shut down immediately C. The firm should continue to produce since it is making profit D. The firm should adjust (increase or decrease) outputarrow_forwardi. Calculate the marginal cost, marginal revenue and profit for each unitof production. ii. How many units should the firm produce to maximise profit?arrow_forwardWhat is relationship between total revenue (TR) and cost (TC) if the price is greater than ATC (is TR greater, less, or equal to TC)? Does the firm make positive economic profit or loss?arrow_forward
- Good day class, I. Find the Maximum profit and graph: 1. P = -0.2x2 + 8x -76 2. P= -0.1x2 + 4x - 10 II. Find The Minimum Cost and graph : 1. C = x2 - 16x + 74 2. C = x2 - 40x + 405 Thank you.arrow_forwardI. A company produces at an output level where marginal cost is equal to marginal revenue and has the following revenue and cost levels: Total revenue = $1,450 Total cost = $1,500 Total variable cost = $1,300 What would you suggest? a. Shut down. b. Continue to produce because the loss is less than the total fixed cost. c. Increase production to lower the marginal cost. e. Raise the price. II. At current long-run production levels, the marginal revenue of a competitive firm is $15 and the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should a. cut back on production. b. stop production all together. c. produce more. d. continue producing at current levels.arrow_forwardLaura’s cleaning service is a profit-maximising, competitive firm. Laura cleans awhole house for $156. Her total cost each day is $1680, of which $480 is a fixed cost. She cleans 8 houses a day.(a)Should Laura shutdown her business in the short-run, assuming that she cannot recover her fixed cost?(b) Should she exit in the long-run?arrow_forward
- Which of the following statements can be drawn from this diagram? a. Point C represents a lower level of profit in comparison to Point B. b. The firm exhibits diseconomies of scale if it produces more than 10 units. c. The firm makes zero economic profit if it can sell 20 units and charge 20. d. The firm maximises its profit by producing 20 units.arrow_forwardIf total cost is equal to total revenue, then profit is equal to zero. a. True b. Falsearrow_forwardIn a short-term perfectly competitive market, profit-maximizing company A's marginal cost is 50, average variable cost is 45, and average total cost is 55 under the current production level. When the market price is 50, which of the following statements is correct? A. The company is experiencing losses. B. The company should shut down. C. Total variable cost can be covered by total revenue. D. Sunk cost is higher than total variable cost О А, С О А, В, С ○ A, C, D ○ B, D ○ B, C, Darrow_forward
- At profit-max quantity, the firm earns _________________economic profit on the last unit sold. Why?arrow_forwardWhen total fixed costs increase, a - the profit - maximizing level of output falls. b the firm may be forced to shut down if total fixed costs get too high. c economic profit decreases. d all of the above occurs.arrow_forwardPlease show make the work. I do not understand how the answer is C. However, someone said the answer is B. A company is producing 15,000 units. At this output level, marginal revenue is $22, and the marginal cost is $18. The firm sells each unit for $48 and average total cost is $40. What can we conclude from this information? a. The company is making a loss. b. The company needs to cut production. c. The company needs to increase production. d. Not enough information is provided. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.arrow_forward
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