Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 15P
To determine
Complete the table and answer the sub parts.
Introduction:
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
21. The long-run average cost curve for an industry is represented
in the following graph. Add short-run average cost curves and
short-run marginal cost curves for three firms in this industry,
with one firm producing an output of 10,000 units, one firm
producing an out put of 20,000, and one firm producing an out-
put of 30,000. Label these as Scale 1, Scale 2, and Scale 3, respec-
tively. What is likely to happen to the scale of each of these three
firms in the long run?
Cost per|
unit ($)
LRAC
10,000
20,000
30,000
Units of
output
The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost., now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of $25 each. a. What will be the company’s profits or losses? b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? c. At the given quantity and price, is the marginal unit produced adding to profits?
Table: Total Cost for a Perfectly
Competitive Firm
Quantity
per Period
Total Cost
$10
16
20
22
3
4
24
25
27
30
6.
34
39
9.
10
45
(Table: Total Cost for a Perfectly Competitive Firm) Suppose there is a price of
$3.00. If this firm is behaving optimally, it will:
O shut down in the short run, shut down in the long run
O produce in the short run, shut down in the long run
O shut down in the short run, produce in the long run
O produce in the short run, produce in the long run
Knowledge Booster
Similar questions
- Hi. I'm a little confused on how the short run supply curve of a price taking firm is determined. Do i use the marginal costs and the average variable cost curves and use the diagram for that to find the short run supply curvearrow_forward(What’s So Perfect About Perfect Competition) Use thefollowing data to answer the questions.Marginal MarginalQuantity Cost Benefit0 — —1 $ 2 $102 $ 3 $ 93 $ 4 $ 84 $ 5 $ 75 $ 6 $ 66 $ 8 $ 57 $10 $ 48 $12 $ 3a. For the product shown, assume that the minimum pointof each firm’s average variable cost curve is at $2. Construct a demand and supply diagram for the product andindicate the equilibrium price and quantity.b. on the graph, label the area of consumer surplus as f.Label the area of producer surplus as g.c. If the equilibrium price were $2, what would be theamount of producer surplus?arrow_forward40 The following cost data is for a firm which in nelling in a perfectly competitive market It the market price for the firm's product is $32, the competitive firm will: t of Total Average Average variable Average total Marginal product fixed cost cost cost cost $100.00 $17.00 $117.00 $17 50.00 16.00 66.00 15 3. 33.33 15.00 47.33 13 25.00 14.25 39.25 12 20.00 14.00 34.00 13 9. 16.67 14.00 30.67 14 7. 14,29 15.71 30.00 26 8. 12.50 17.50 30.00 30 9. 11.11 19.44 30.55 35 10 10.00 21.60 31.60 41 11 9.09 24,00 33.09 48 7.33 26.67 35.00 56 12 Select one: O a. produce 8 units at an economic profit of $16. O b. produce 8 units at a loss equal to the firm's total fixed cost. O c. produce 5 units at a loss of $10. nd produce 7 units at an economic profit of $41.50.arrow_forward
- 36 Total Total Average Average Output Fixed Variable Total Variable Total Marginal (Q) Cost Cost Cost Cost Cost Cost I of 150 $500 $400 $900 $2.67 200 $500 $800 $1,300 $6.50 The table above shows costs for a firm. When Output (Q) changes from 150 to 200, Marginal Cost (MC) is equal to: Select one: a. $400 b. $8.00 c. $4.00 d. $5.00arrow_forwardAnswer the question on the basis of the following demand and cost data for a specific firm. Demand Data Cost Data (1) Price (2) Price (3) Quantity Output Total Cost $ 10.50 $ 10.00 6 6 $ 61 10.00 8.85 7 7 62 9.50 8.00 8 8 64 9.00 7.00 9 9 67 8.50 6.10 10 10 72 8.00 5.00 11 11 79 7.50 4.15 12 12 86 Suppose that entry into the industry changes this firm's demand schedule from columns (1) and (3) to columns (2) and (3). Economic profit will Multiple Choice fall to $4. decline to zero. increase by $6. fall by $8.arrow_forwardThe market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. O The price of fertilizer must be less than marginal cost. O The price of fertilizer must be less than average total cost. O The price of fertilizer must be equal to average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Firm Market Demand ATC -- ---- P. TAyd MC Quantity Quantity If firms in the market are producing output but are currently making economic losses, illustrates the present situation for the typical firm in the market, and S ▼ indicates the corresponding supply curve. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. O The…arrow_forward
- 15. The table below shows cost data for producing different amounts of refrigerators. Use the given information to answer the questions below. Quantity Total Cost Variable Cost Marginal Cost Average Variable Cost Average Total Cost in $ in $ in $ in $ in $ 241 0 271 30 361 120 491 250 681 440 901 660 0 10 What is the profit (loss) at that level of production? 20 30 40 50 How many refrigerators would a competitive firm produce if the market price was $19? 3 9 13 19 22 3.00 6.00 8.33 11.00 13.20 27.10 18.05 16.37 17.02 18.02arrow_forwardQuestion 38 Suppose the market for microwave ovens is perfectly competitive. Also suppose a firm that produces microwave ovens has an average total cost of $200 when selling 200 units. The fixed cost is $100, and the average total cost when selling 201 units is $201. If the market price for a microwave oven is $500, this firm should sell 201 units because its fixed costs are so low. sell 200 units because the marginal cost of the 201st exceeds marginal revenue sell 201 units because it adds to profits. sell 201 units because the marginal cost of the 201st is less than marginal revenue.arrow_forwardQUESTION 17 Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 Quantityarrow_forward
- Assume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $56.00 (i) Will this firm produce in the short run? (Click to select) No Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select) Not applicable Loss-minimizing…arrow_forwardAssume that the cost data in the following table are for a purely competitive producer: TotalProduct AverageFixed Cost AverageVariable Cost AverageTotal Cost Marginal Cost 0 1 $ 60.00 $ 45.00 $ 105.00 $ 45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 a. At a product price of $56.00 (i) Will this firm produce in the short run? yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? profit- maximizing output = 9 units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 16 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the…arrow_forwardritaj.birzeit.edu O Final Exam Question 1: Shown below are the graphs of the firm's marginal cost, average variable cost, and average total cost. COST PER UNIT (Cents per bushel) 100 90 80 70 60 50 40 30 20 10 1 2 3 4 5 6 7 8 9 10 QUANTITY OF OUTPUT (Thousands of bushels) A. On the graph, identify each curve.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning