12. Bob's Barbershop manager has calculated the marginal revenue is Ksh 200 and marginal cost is $250. What should she do to maximize profit? A. expand output. B. do nothing without information about your fixed costs. C. reduce output until marginal revenue equals marginal cost. D. expand output until marginal revenue equals zero. E. reduce output beyond the level where marginal revenue equals zero. 13. People's average incomes fall from £1,000 a week to £600 a week. As a result, demand for potatoes increases from 1 million tonnes to 1.2 million tonnes a week. The income elasticity of demand for potatoes is A. -0.25 В. 0.6 С. -0.5 D. -2 14. If the price of a good with a price elasticity of supply of 2.5 increases by 10%, the quantity supplied will: A. Fall by 25% B. Rise by 25% C. Fall by 40% D. R ise by 0.4% 15. A firm facing a perfectly price elastic demand curve, ceteris paribus A. can sell all it produces only by lowering its price below the market price. B. can raise its price and not lose all its customers. C. will sell the same amount regardless if it raises or lowers the price it charges. D. will have zero quantity demanded if it raises its price above the market price

12. Bob's Barbershop manager has calculated the marginal revenue is Ksh 200 and marginal cost is $250. What should she do to maximize profit? A. expand output. B. do nothing without information about your fixed costs. C. reduce output until marginal revenue equals marginal cost. D. expand output until marginal revenue equals zero. E. reduce output beyond the level where marginal revenue equals zero. 13. People's average incomes fall from £1,000 a week to £600 a week. As a result, demand for potatoes increases from 1 million tonnes to 1.2 million tonnes a week. The income elasticity of demand for potatoes is A. -0.25 В. 0.6 С. -0.5 D. -2 14. If the price of a good with a price elasticity of supply of 2.5 increases by 10%, the quantity supplied will: A. Fall by 25% B. Rise by 25% C. Fall by 40% D. R ise by 0.4% 15. A firm facing a perfectly price elastic demand curve, ceteris paribus A. can sell all it produces only by lowering its price below the market price. B. can raise its price and not lose all its customers. C. will sell the same amount regardless if it raises or lowers the price it charges. D. will have zero quantity demanded if it raises its price above the market price

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 2.4P

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Question #5What is the MC=MR Profit Maximization point? What quantity should Delicious Deserts be producing at 'and' what price should they be charging to maximize their profits? Question #6 Why isn't it a good idea for them to produce and sell as many cakes as they can? Is it more profitable to sell less cakes at this current stage of their business? Question #7Do you have any other recommendations for Delicious Deserts to increase their revenues, profits, market share, and client retention?
c. Note that these results imply the marginal revenue, or marginal benefit, of website analysis is MB(X) = 11.09 − 0.2 × X and the marginal cost of website analysis is MC(X) = 0.21 × X. What level of website analysis will maximize net benefits? Round to the nearest hundredth.
Consider the total cost and total revenue of Farm Fresh Diary Output Quantity (Milk in Liters) Total Revenue ( in Rupees) Total cost ( in Rupees) 0 0 30 1 80 50 2 160 80 3 240 120 4 320 170 5 400 230 6 480 300 7 560 380 8 640 470 Calculate Price, Average Revenue, Marginal revenue. Explain the conditions under which these values remain the same? Calculate Profit, Marginal cost and change in Profit. What output quantity of milk maximizes profit for Farm Fresh Diary? iii. Graph MC and MR curves of Farm fresh Diary. What are the rules of Profit Maximization suggested by this graph? Suppose a tax of Rs.20 is imposed and government fixes price of milk at Rs.80 a liter. Then what should be strategy of Farm Fresh Diary?
28. Marginal cost is greater than marginal revenue beyond output 320. True False 29. At 100 output, marginal revenue is less than marginal cost. * True False
Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…
Use Table A below and calculate ATC, Profit, marginal revenue and marginal cost at each quantity of output - keep your calculation for follow up questions: Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 1 $1,700 $1,700 $2,000 2 $1,650 $3,300 $2,800 3 $1,600 $4,800 $3,500 4 $1,550 $6,200 $4,000 5 $1,500 $7,500 $4,500 6 $1,450 $8,700 $5,200 7 $1,400 $9,800 $6,000 8 $1,350 $10,800 $7,000 9 $1,300 $11,700 $9,000 a. Q P TR TC ATC Profit MR MC 0 $1,900 $0 $1,000 $0 -$1000 $0 $0 1 $1,700 $1,700 $2,000 $2,000 -$300 $1,700 $1,000 2 $1,650 $3,300 $2,800 $1,400 $500 $1,600 $800 3 $1,600 $4,800 $3,500 $1,166.66 $1,300…
Max barbershop is considering raining prices by $5 per haircut. Their current price for a cut is $23 abd babers receive 50% of the revenues for each haircut. Since Max is concerned about demand dropping due to the price increase, he is also planning to start advertising the shop on TV for $895 month. If current fixed cost are $11,576/month the current profit is $2000/month by what percent can demand decrease at the new price level and maintain current levels of profit on the business?
Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the quantity effect of reducing the price from $100 to $80? Table 2 Price Amount Demanded Total Revenue Marginal Revenue $160 0 $0 n/a $130 90 $11,700 $130.00 $100 200 $20,000 $75.45 $80 350 $28,000 $53.33 $40 600 $24,000 -$16.00 $0 850 $0 -$96.00 Question 4 options: a) $4,000 b) -$20,000 c) $28,000 d) -$4,000 e) $12,000
Table 2 shows Media Cable’s demand table, total revenue, and marginal revenue at each price. What is the price effect of reducing the price from $100 to $80?Table 2 Price Amount Demanded Total Revenue Marginal Revenue $160 0 $0 n/a $130 90 $11,700 $130.00 $100 200 $20,000 $75.45 $80 350 $28,000 $53.33 $40 600 $24,000 -$16.00 $0 850 $0 -$96.00 Question 5 options: a) $4,000 b) -$20,000 c) $28,000 d) -$4,000 e) $12,000
Total Total Revenue Cost Quantity (TR) (TC) Profit (MR) (MC) 0 0 8 1 8 10 2 16 11 3 24 13 4 32 16 5 40 20 6 48 27 7 56 36 8 64 47 9 72 65 10 80 90 Marginal Marginal Revenue Cost Fill in the table to determine the profit maximizing level of output, price, and profit. The optimal quantity is A/ A (number) units, the optimal price is (number) dollars, which maximizes (number) dollars. This table A profits at displays profit maximization under the (perfect competition / monopolistic competition / oligopoly / monopoly) market structure.
*2. The demand for meat pies is given by Qd = 60,000 – 10,000P. The current price for meat pies is $3.50. a) If the price increases, will more or less money be spent on meat pies? b) At what point will revenue on pies be maximized? 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.
Consider the total cost and total revenue of Farm Fresh DiaryOutput Quantity(Milk in Liters)Total Revenue( in Rupees)Total cost( in Rupees)0 0 301 80 502 160 803 240 1204 320 1705 400 2306 480 3007 560 3808 640 470i. Calculate Price, Average Revenue, Marginal revenue. Explain the conditions underwhich these values remain the same? ii. Calculate Profit, Marginal cost and change in Profit. What output quantity of milkmaximizes profit for Farm Fresh Diary?iii. Graph MC and MR curves of Farm fresh Diary. What are the rules of ProfitMaximization suggested by this graph?iv. Suppose a tax of Rs.20 is imposed and government fixes price of milk at Rs.80 a liter.Then what should be strategy of Farm Fresh Diary?