A bakery operating in competitive markets sells itsoutput for $20 per cake and rents ovens at $30 perhour. To maximize profit, it should rent ovens untilthe marginal product of an oven isa. 2/3 cake per hour.b. 3/2 cakes per hour.c. 10 cakes per hour.d. 25 cakes per hour.

A bakery operating in competitive markets sells itsoutput for $20 per cake and rents ovens at $30 perhour. To maximize profit, it should rent ovens untilthe marginal product of an oven isa. 2/3 cake per hour.b. 3/2 cakes per hour.c. 10 cakes per hour.d. 25 cakes per hour.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 9SQ

See similar textbooks

Related questions

Q: The table below gives a firm's costs. Output Fixed costs ($) Total costs ($) $80 $50 1 $80 $55 2 $80…

A: PRODUCTION cost is the incurred monetary value to produce the goods on factor of production . It is…

Q: of 2 million units. The price that consumers are willing to pay for this output is $50 per unit. If…

A: The marginal revenue curve is a horizontal line at the market price, implying perfectly elastic…

Q: 1 3. For the technologies y=min{*,4.x, } and y=+x, compute: 4 a) the total cost and the cost of…

A: Marginal cost (MC) is the addition to the total cost by producing one more unit of output. Average…

Q: he short-run and long-run average cost functions of a firm are generally U-shaped. This implies high…

A: In economics, a CF {"cost function"} is described as a function of an output quantity and P {prices}…

Q: sume that a firm can produce product A, product B, or product C with the resources it currently ys.…

A: Given Product Market Price Output Total Cost A $5 8 30 B $4 20 30 C $1.5 50 30

Q: Lt a product price of $56 Vill this firm produce in the short run? ii) If it is preferable to…

A: Short run is defined as the time period in which atleast one of the factors used is fixed and others…

Q: Lake Charles Seafood makes 500 wooden pack-ing boxes for fresh seafood per day, working in two…

A: Productivity is represented as the ratio between the amount of output and the number of inputs. In…

Q: armer Sam is supplying corns in a perfectly competitive market. In Year 1 he sells 3000 tons of…

A: revenue is the monetary value received from selling the products with respective price level .…

Q: See the cost information in the table below. The marginal cost of the 6th unit is Quantity…

A: The marginal cost of a good refers to the increment in the total cost when an additional unit of a…

Q: Output TFC TVC TC MC ATC A 25 25 --- --- ---- -- В 1 25 25 50 25 50 C 2 25 40 65 32.5 D 3 25 70 95 E…

Q: a. Calculate the marginal cost and average variable cost for each level of production. b. How much…

A: A perfectly competitive market is a hypothetical market which shows following characteristics:…

Q: 1. Šunrise Juice Company sells its output in a perfectly competitive market. The firm's total cost…

A: Marginal cost = Change in total cost/Change in output Average total cost = Total cost/Output a)…

Q: Hannan's pizza shop currently produces 100 pizzas per day and sells them for a profit. She is…

A: Option a can be eliminated because the reason doesn't account for future profitability. It doesn't…

Q: . Marginal Cost Suppose the monthly total costfor the manufacture of 19-inch television sets isC(x)=…

A: The total cost shows the market value of inputs used by the firm in the production of goods and…

Q: Number of Cakes VC MC AVC FC TC ATC 0 50 1 30 2 50 3 25 4…

A: Marginal cost is the additional cost incurred in order to produce an additional unit of output.

Q: The market for apple pies in the city of Ectenia is competitive and has the followingdemand…

A: a. It is known that the marginal cost which shows the additional rise in cost due to the production…

Q: Required a. How much is the fixed cost to produce the natural-organic oil? b. How many barrels of…

A: The fixed cost does not change with change in the level of output. The variable cost changes with…

Q: A bakery operating in competitive markets sells itsoutput for $20 per cake and pays workers $10…

A: We have, Price of output (P) = $20 Wages (w) = $10 In the competitive market, to maximize the…

Q: d you have left over to buy an apple. Or something healthy. ost the right answers on the discussions…

A: Total utility is the general fulfillment that a buyer gets from the utilization of specific labor…

Q: 2. You have a plant that produces copiers for sale. Your costs for producing copiers are 1: $42, 2:…

A: Given: Number of copies Total cost ($) 1 42 2 44 3 47 4 50 5 54 6 60 7 69 8 80

Q: Please see the attached two pictures, one for the graph, and the other for the questions.

A: In the third part of this question, which was uploaded in the previous link, there is a correction.…

Q: The MARKET PRICE for berries is currently at $75 per metric ton. Green Berry farms is currently…

A: Green Gardens Berry farms (quantity in metric tons) Quantity of farmworker TVC TFC TC MC 1 3 45 20…

Q: Following is the information available for Bubble Gums produced by Bano and Co. Output (Q) Labor…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3.Please resubmit the question…

Q: 3. After graduation, Mitul went back to his village and started a commercial fishery. The…

Q: mark Merchant owns and manages a café at food court. His monthly figures are: Revenue: $5,000…

A: Profit is the major motive of all the firms operating in a market. Profit is the difference between…

Q: Number of Cakes VC MC AVC FC TC ATC 50 1 30 2 50 25 4 155 Table 8.3 Table 8.3 presents the cost…

A: Marginal cost is the cost of producing an additional unit of output, If candy produces 3 cakes then…

Q: 2 Complete the following table Price Output (0fied cost Variable co Revenue Total Cos Marginal…

Q: 5. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles.…

A: ATC estimates how much the total cost of the firms is in each production unit. In the LR(long…

Q: Assume that the cost data in the following table are for a purely competitive producer:

A: In perfect competition, there is a large number of buyers and sellers and sellers are selling…

Q: SE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS).…

A: The maximizes profits where the MR= MC. The MC curve cuts the AVC cost curve at its minimum point.…

Q: A Managment instutute can operate for a maxium 12 hours .lectures are the outout of the institute…

A: A function affirms the connection between one info and one result, or many contributions to yield a…

Q: stlon 24 One of these intersects the horizontal axis and may reach the negative area: O Total…

A: Question 24 The answer is Option 2 - Marginal Product Therefore, Marginal product intersect the…

Q: Output TFC TVC TC MC ATC A 25 25 ------ ------ B 1 25 25 50 25 50 C 2 25 40 65 32.5 3 25 70 95 E 4…

A: The marginal cost is the cost of producing an additional one unit of output. It is calculated by…

Q: (*4") At nine units of output (Q-9), Average Variable Cost is (AVC=) $15 and Average Fixed Cost is…

A: Marginal cost is the additional cost when produce one or more unit here we calculate the marginal…

Q: The fllowing Table describes the costs of production for a local firm Quantity vc TC APC AVC ATC MC…

A: Recall the following concepts: Variable Cost (VC): Costs which increase with increase in quantity…

Q: Part I Given that the marginal cost (mc) to manufacture an Iphone per day is represented by the…

A: Answer - "Thank you for submitting the questions .But, we are authorized to solve one question at a…

Q: a. Compute the average cost and marginal cost. Units of output Total Cost Average Cost Marginal Cost…

Q: 81. If a firm is operating efficiently, how can it reduce cost in the short run? O downsizing…

A: In a market, a firm can efficient operates is business if it is able to earn economic profit in the…

Q: Cost LRAC 40 30 20 10 100 200 400 800 Output b. What happened to the cost of one good as the firm…

A: Marginal is the cost of producing 1 additional unit of output.

Q: A firm is producing 20 units with an averagetotal cost of $25 and a marginal cost of $15. Ifit…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: 1. The value of the inputs owned and used by a firm is an explicit cost. O a. True O b. False

A: When a firm makes production activities, there are different type sof cost associated with this…

Q: Marginal cost is given by 30 + 20Q- 12Q2. Fixed cost is 100. What is the average cost? 30 OA 3Q +…

A: Answer- Need to find - Avg. cost Given in the question- Marginal cost = 30 + 20Q - 12Q2 Fixed cost…

Q: 5) Sarah's Pretzel plant has the following short-run cost function: Cg, K) wg3 + 50K where q is…

A: Cost refers to the amount the is incurred for using factors of production to produce goods. Profit…

Q: Use the following to answer questions 5-6: Production Data for Baseball Bat Company Total output…

A: Diminishing marginal returns are set in when each additional labor hired leads to less extra output.

Q: Labor Output (units per week) (workers per week) 1. 20 50 3 70 4. 85 5. 95 6. 100 The table above…

A: Marginal cost: - marginal cost is the cost incurred in the production of an additional quantity of…

Q: At Emory's Pens and Pencils when they produce 50 pens their total cost is $80. Emory's marginal cost…

A: Average Total Cost (ATC) can be calculated by dividing the Total Cost (TC) by Quantity (Q).

Q: Consider the following cost information for apizzeria:Quantity Total Cost Variable Cost0 dozen…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: Suppose the cost data below are for Shopify. a firm based in Waterloo, Ontario that is in an…

A: Marginal Cost is the change in total cost with respect to change in total output. We are going to…

Q: Charlie Co. sells pastries and its production and cost table is given below. A worker costs $100 a…

A: Marginal cost measures the additional cost incurred in order to produce one additional unit of…

Question

A bakery operating in competitive markets sells its
output for $20 per cake and rents ovens at $30 per
hour. To maximize profit, it should rent ovens until
the marginal product of an oven is
a. 2/3 cake per hour.
b. 3/2 cakes per hour.
c. 10 cakes per hour.
d. 25 cakes per hour.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costs
Requireda. How much is the fixed cost to produce the natural-organic oil? b. How many barrels of natural-organic oil should the firm produce to maximize its profit? c. How much is the price of the natural-organic oil per barrel? d. At what production level would the marginal cost exceed the average cost? e.bHow many barrels of natural-organic oil reflect the lowest minimum average variable cost?
A. How much is the fixed cost to produce the natural-organic oil? B. How many barrels of natural-organic oil should the firm produce to maximize its profit? C. How much is the price of the natural-organic oil per barrel? D. At what production level would the marginal cost exceed the average cost? E. How many barrels of natural-organic oil reflect the lowest minimum average variable cost?
An ice cream producer has ﬁxed costs of $70,000 per month, and it can produce up to 15,000 ice cream tubs per month. Each tub costs $10 in the market whilethe producer faces variable costs of $3 per tub.a. What is the economic breakeven level of production?b . Calculate the ice cream producer’s monthly proﬁts at full capacity. What would happen to the monthly proﬁts if another ice cream producer entered themarket, driving the price of ice cream tubs down to $7 per unit?
16) Suppose the total cost of producing T-shirts can be represented as TC = 50 + 2q,where q is output level. Which of the following statements is TRUE at all levels ofoutput?A) MC = AVCB) MC = ACC) MC > AFC.D) All of the above.E) A and B only
15) If the average cost (AC) of producing a good is increasing as a firm produces moreoutput (q), then which of the following must be TRUE?A) AFC is falling; AVC is rising; MC > AVCB) AFC is falling; AVC is falling; MC > AVCC) AFC is rising; AVC is rising; MC > AVCD) AFC is rising; AVC is rising; MC < AVCE) AFC is falling; AVC is falling; MC < AVC
A bakery operating in competitive markets sells itsoutput for $20 per cake and pays workers $10 perhour. To maximize profit, it should hire workers untilthe marginal product of labor isa. 1/2 cake per hour.b. 2 cakes per hour.c. 10 cakes per hour.d. 15 cakes per hour.
The market for apple pies in the city of Ectenia is competitive and has the followingdemand schedule:Price Quantity Demanded$ 1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0 ch producer in the market has fixed costs of $9 and the following marginal cost:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost and average total cost for 1 to 6 pies.b. The price of a pie is now $11. How many pies are sold? How many pies does eachproducer make? How many producers are there? How much profit does eachproducer earn?c. Is the situation described in part (b) a long-run equilibrium? Why or why not?d. Suppose that in the long run there is free entry and exit. How much profit does eachproducer earn in the long-run equilibrium? What is the market price? How many piesdoes each producer make? How many pies are sold in the market? How many pieproducers are operating?
In 2012, Barrick Gold’s two most productive mines were Cortez and Goldstrike in Nevada, USA. Table 4.5 reports their financial performance. The “average cash cost” includes operating cost, royalties, and taxes, while the “average cost” includes the cash cost as well as amortization.a. Suppose that each mine produces at the rate where the (upward-sloping) marginal cost equals the price of gold. Illustrate the shifts in Goldstrike’s marginal cost curve, selling price, and production between 2010 and 2012. (Hints: The marginal cost curve changes over time. You have only one data point on each curve. Assume any other data necessary to draw the figures.)b. Use the 2012 data to compare the (i) short-run break-even conditions for Cortez and Goldstrike; and (ii) the long-run break-even conditions for the two mines.c. If the price of gold falls to $600 per ounce, how should Barrick adjust production at the two mines?
4. Think of a production technology that has increasing marginal cost until a “mile- stone" level of output y*, after which the marginal cost begins to decline. Plot the marginal cost and average cost curves for this technology, and discuss their relations. [Midterm 2022]
COURSE: ECONOMY A company has a total cost function TC = 80+3q+2q2 and a marginal cost function MC = 3+4q. If market price is P = $30 and it is producing 10 units:(a) Is firm maximizing its profits?b) What quantity should it produce in long run? Hint: MC= ATCc) Construct a table with all costs.d) Plot profit maximization points in short and long run.
. In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut sells for the market price of $0.75 and they sell out every day. Assume that this company has labor costs of $275 and materials costs of $400. a. Using only variable costs, what is the donut shop’s daily profit? - Now assume that the owner is thinking of adding a second location downtown. The capital investment required is $4,000 (Sunk Cost). The $4000 is Sunk Cost. The normal rate of return is 5%. b. If the new shop could operate under the same conditions as the original location is it a good business decision to expand? c. What would be the new shop’s daily profit?