Sample Problem 9

Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry.   For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry.   For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity Produce or Shut Down? Profit or Loss? (Dollars per jacket) (Jackets) 4                8                12                36                48                60                  On the following graph, use the orange points (square…

Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.     In the short run, at a market price of $45 per sweater, this firm will choose to produce    sweaters per day.   On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm’s profit or loss if the market price is $45 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm’s    would be    thousand per day in the short run.

Torushka is a profit maximizing firm producing wooden dolls, which it can produce and sell in its home country, Russia, and abroad in France. The average cost (AC) curve on the following graph represents Igrushka's cost of producing wooden dolls within one factory, whether in Russia or in France. COST (Dollars per wooden doll) 10 9 0 D 10 20 30 40 50 60 70 80 QUANTITY (Thousands of wooden dolls) AC 90 100 ? ←

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Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry.     For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.

Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a price-taker market, and the market price is $10 per shirt. The following graph shows Larry's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Larry produces, including zero shirts. 125 100 TOTAL COST AND REVENUE (Dollars) 25 ☐ Total Cost ☐ -50 0 1 2 3 4 5 6 7 8 QUANTITY (Shirts) Total Revenue A Profit (?) Calculate Larry's marginal revenue and marginal cost for the first seven shirts he produces and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. 25 2 COSTS AND REVENUE (Dollars per shirt) 0 1 2 3 5 6 7 8 QUANTITY (Shirts) Marginal Revenue Marginal Cost Larry's profit is maximized when he produces is shirts. When he does this, the marginal cost of the previous shirt he…

Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. PRICE (Dollars per oven) 100 90 80 70 40 30 20 10 0 0 5 0 MC ATC AVC 10 15 20 25 30 35 QUANTITY (Thousands of ovens) 40 45 50 (?)

For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit- maximizing level of output and how much profit will this producer earn if the price of pizza is $0.50 per slice? Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label. Enter your responses as whole numbers. Price ($/slice) 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0 Cost Curves MC ATC Quantity (slices/day) AVC L 100 200 300 400 500 600 700 800 900 o When the price is $0.50 per slice, the profit-maximizing level of output is o slices per day. At the profit-maximizing level of output, the producer's profit is: $ 225 per day.

The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner.    Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00   a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is   (Click to select)   falling   rising   at a minimum  and the marginal cost of cheeseburger production is   (Click to select)   falling   rising   at a minimum  .   b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is   (Click to select)   falling   rising   at a minimum  and the average total cost of cheeseburger production is   (Click to select)   falling   rising   at a minimum  .

Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q = 12? (approximate to one decimal) ATC = AVC = AFC = What is TC, VC and FC at q = 12? Show your calculations. b) If the price of olive oil is $3.50, how much oil would a price - taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break- even price/cost of a pound of olive oil? d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sell at this price? ง 5) Examine the graph below that presents casts for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal) ATC= AVC- What is TC, VC and FC at q-12? Show your calculations. AFC= MC ATC AVE Quantity 18 b) If the…

For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.50 per slice?Instructions: In the graph below, label all three curves by clicking on the dropdown to select the appropriate label.       Instructions: Enter your response as a whole number. If you are entering a negative number, be sure to include a negative sign (−).   When the price is $1.50 per slice, the profit-maximizing level of output is slices per day.   Instructions: Enter your response rounded to the nearest penny (two decimal places).   At the profit-maximizing level of output, the producer's profit is: $ per day.

Douglas Fur is a small manufacturer of fake-fur boots in New York City. The following table shows the company’s total cost of production at various production quantities.

The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. COSTS (Della) 72 04 8 56 24 16 . 0 Price (Dollars per lamp) MOD 8 12 36 48 60 10 ATC AVC 40 00 QUANTITY (Thousands of lamps) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. Quantity (Lamps) ? Produce or Shut Down? Profit or Loss?

The graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because of limited space and resources for production activity: To increase output, the firm must bring older, less-reliable equipment out of storage, pay its workers extra for overtime hours, and so on. If the firm is able to practice price discrimination, using the two prices indicated by the two points indicated on the demand curve, use the area tool to outline the region that represents the net revenue (revenue minus production costs, but ignoring fixed costs). The lower boundary of the region should be slanted. To refer to the graphing tutorial for this question type, please click here. Price MR MG D Quantity

pshotic 166& 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) Σ 50 PRICE (Dollars per oven)

Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company’s total cost of production at various production quantities. On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should start your MC curve by placing an orange square at (0.5, 95).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

The graph shows the demand curve for cars in 2017. Suppose that the least-possible cost of producing a car is $10,000 and that the efficient scale is 10,000 cars a month. Draw the average total cost curve for a car manufacturer in 2017. Label it. 50,000 40,000- 30,000 20,000 10,000- Price (dollars per car) D 20 30 40 10 Quantity (thousands of cars per month) >>> Draw only the objects specified in the question. Q OU

Suppose the imaginary company of Panthera is a small, Raleigh-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost (Pairs) (Dollars) Marginal Cost (Dollars) Fixed Cost Variable Cost (Dollars) (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) 0 120 1 210 2 270 3 315 4 380 475 6 630

Suppose the imaginary company of Panthera is a small, Cedar Rapids-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities.   Fill in the remaining cells of the following table. (Graph is in images)

The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. (use MC, ACT, and AVC) Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market.

For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.00 per slice?

for the second part   The orange make a profit if the price of oranges is above $ per crate. (Enter your response as an integer.).

Douglas Fur is a small manufacturer of fake-fur boots in San Diego. The following table shows the company’s total cost of production at various production quantities. On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $210, so you should start your ATC curve by placing a green point at (1, 210). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $90, so you should start your MC curve by placing an orange square at (0.5, 90).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below.  a.What is the level of profit for this firm at the profit maximizing output?  b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find?  c. What do you predict will happen in this market over the long run?

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If Daniel sells 250 hamburgers at a price of $3.00, and his average cost of producing 250 hamburgers is $2.50, what is his profit? Profit = $ (enter your response in dollars and cents).

Could you answer these questions, in a powerpoint

Suppose the imaginary company of Athena is a small, Raleigh-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost (Pairs) (Dollars) (Dollars) COSTS (Dollars per pair) 200 175 150 125 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $160, so you should start your ATC curve by placing a green point at (1, 160). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $100, so you…

Suppose the imaginary company of Roobek is a small, Cedar Rapids-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 0 60       — —   1 155           2 220           3 255           4 300           5 350           6 450

Homework (Ch 14) 6. Deriving the short-run supply curve Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 80 70 60 АТС 50 40 30 20 AVC MC O 10 25 30 35 40 45 50 5 10 15 20 QUANTITY (Thousands of shirts) COSTS (Dollars)