EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 2SP
(a)
To determine
Calculate the total revenue for business at each level of output.
(b)
To determine
Calculate the total profit for the business at each rate of output.
(c)
To determine
Identify whether the company operates in the short run or long run.
(d)
To determine
Calculate the profit maximizing output of the firm.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Solve the following
Problem 2. Restaurants in Baltimore operate under a total cost function
TC(q) = 3q + 5q^2 + 30
Which part of the cost is fixed cost and which part of the cost is variable cost?
What is the marginal cost, MC? What is the average total cost, ATC? What is the average variable cost, AVC?
In the long run, calculate the equilibrium price and restaurants’ profits.
Below what price will restaurants shut down? (Hint: Consider the AVC.)
a) A profit-maximizing business incurs an economic loss of $10,000 per year. Its fixed cost is $15,000 per year. Should it produce or shut down in the short run? Should it stay in the industry or exit in the long run? b) Suppose instead that this business has a fixed cost of $6,000 per year. Should it produce or shut down in the short run? Should it stay in the industry or exit in the long run?
Chapter 9 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
Knowledge Booster
Similar questions
- 1arrow_forwardMarginal cost= 2x+3 Average variable cost= x+3 Variable cost=x^2 + 3x x is the daily output. Product's price is 13 dollars. Part a) Calculate the level of output that will be produced. Part b) Calculate the producer surplus of the firm. Part c) The fixed costs are 5 dollars. In the short run, is the firm making a 0 economic profit, a positive profit, or a negative profit? Explain why.arrow_forward5.arrow_forward
- Please fill out the table attached and answer questions.arrow_forwardA profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a year. Should the firm produce or shut down in the short run?b. Suppose instead that the firm has a fixed cost of $35,000 per year. Should the firm produce or shut down in the short run?arrow_forwardPlease provide quick answerarrow_forward
- Profit maximizing output is at: * 100 320 440arrow_forwardQUESTION 10 Jack sells water bottles. Assume the market for water bottles is perfectly competitive. Jack sells his water bottles at the market price of $9.00. At the profit-maximising output level of 51 water bottles, Jack's average total cost is $4.40 per water bottle. The minimum average variable cost is $3.90 per water bottle. Answer the following questions: a. Jack's economic profit or loss is decimal places (ie: to the nearest cent). (use a negative value if a loss). Answer in dollars, rounded to two b. State whether the following statement is true or false: "At the profit-maximising quantity, Jack is making an economic profit of $4.60 per water bottle." Type T for true, or F for false c. State whether the following statement is true or false: "Jack should shut down if the market price is $3.85 per water bottle." Type T for true, or F for falsearrow_forwardb) A firm's total cost function is TC = 0.1Q³ -0.5Q² + 8Q + 10 and total revenue is TR = 52Q -0.25Q² + 8. i) What is the profit maximizing level of output? ii) Calculate marginal revenue and marginal cost at this point. What do you observe?arrow_forward
- Q.No.2: Consider total cost and total revenue given in the following table: Quantity 2 4 5 Total cost 8 10 11 13 19 27 37 Total Revenue 8. 16 24 32 40 48 56 1. Calculate profit for each quantity. How much should the firm produce to maximize profit? II. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2.5) At what quantity do these curves cross? How does this relate to your answer to part (a)? III.Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?arrow_forwardFarmer Brown grows blueberries. The average total cost, average variable cost, and marginal cost of growing blueberries for an individual farmer are illustrated in the graph to the right. Farmer Brown will incur losses if the market price falls below $ per crate. (Enter a numeric response using an integer.) Furthermore, farmer Brown should shut down in the short run if the market price falls below $ per crate. C Price and cost (dollars per crate) 40- 36- 32- 28- 24- 20- 16- 12- 8- 4 0 MC AT AVI 90 10 20 30 40 50 60 70 80 Quantity of blueberries (crates per week) 1arrow_forwardEconomics Suppose a firm in the short run has Fixed Cost - $100. Its Variable cost - g? where g is the quantity of output. Therefore MC - 2g. Suppose the market price is P - 28. If the firm maximizes profit, how much profit will it make? Round your answer to 2 decimal places. (Please answer with just a number; do NOT put a "$" sign).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning