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Q1) A Explain by giving example the meaning of Economic profit
B) meaning of law diminishing return support your answer by giving example
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- (29. At 100 output, marginal revenue is less than marginal cost) True False 30. In relation to question number 29, producer should produce more up to 440. True FalseSuppose a car firm's marginal revenue of selling a car is $2,100 and marginal cost of producing a car is $2,150. In this case, producing one more car will _____. Question 14 options: a increase profit b decrease profit c neither increase nor decrease profit d not enough informationNews reports from the western United States occasionally report incidents of cattle ranchers slaughtering many newborn calves and burying them in mass graves rather than transporting them to markets. Assuming that this is rational behavior by profit-maximizing "firms," explain what economic factors may influence such behavior. Justify your answer.
- In perfect competition, given certain assumptions hold, the equilibrium quantity will automatically be Question 4 options: Efficient, and the distribution of goods will also be completely equal Inefficient and too large - capitalistic sellers flood the markets! Efficient Inefficient and too small - sellers don't supply enough because they don't care about buyersChloe is a chef who runs a niche food delivery business in a competitive industry. Chloe specializes in making monster calzones. Chloe sells 20 monster calzones per month. Her monthly total revenue is $5,000. The marginal cost of making a monster calzone is $300. In order to maximize profits, Chloe should A) make more than 20 calzones per month. B) make fewer than 20 calzones per month. C) continue to make 20 calzones per month. D) We do not have enough information with which to answer the question.6. Heidi owns a business that sells photographs. The profit function for her business can be modelled by the equation p(x)=-0.5x2-5x-7, where x is the quantity sold, in thousands, and P(x) is the profit in thousands of dollars. How many photos must Heidi sell in order for her business to break even? please type answer, not in writing
- Explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal cost is on the rise. People often believe that large firms in an industry have cost advantages over small firms in the same industry. For example, they might think a big oil company has a cost advantage over a small oil company. For this to be true, what condition must exist? Explain your answer.\beta < 1. 16. A firm uses two inputs, X1 and X2, to produce a good that is described by the production function: Q = f (X1, X2) = X1/2X1/4 12 The firm sells its output at $80 per unit: P = $ 80. The cost of input 1, X1, is $4. The cost of input 2. X2, is $2. (a) Solve for the profit - maximizing input mix, output, and profit. (b) Check the second-order conditions to verify that the profit is at a maximumThere are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through a.economies of scale b.government protection c.control of an important input . b. ABC’s market power a.does b.does not guarantee that the firm makes an economic profit.
- referring to the graph above, the profit-maximizing quantity is a. 7 b. more than 10 c. 10 d. 0You are running a chocolate factory and need to decide on the price to sell the chocolate as well as the quantity to produce. Demand curve; Q = 8.5 - 0.05 * P. The cost curve is C = 100 + 38Q. The business is a profit maximizer. 1) What is the best price to charge each week? 2) What is the best quantity to make each week? 3) What are the expected profits Is it possible to get this in an excel with equation formulas1. If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level? Explain your answer. 2. A business firm produces and sells a particular Variable cost is P30/unit. Selling price is P40 per unit. Fixed cost is P60,000. a. What is the break-even quantity and break-even point? Show your solution. 3. A manager makes the statement that output should be expanded as long as average revenue exceeds average Does this strategy make sense? Explain. 4. Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be Price of steel P17 per unit. Output (Q) TFC TVC TC MC TR MR Profit/Loss 0 500 0 1 500 50 2 500 90 3 500 140 4 500 200 5 500 270 6 500 350 7 500 450…
