Assuming a firrh has this short-run production data below, do the following: a. fill-in the rest of the table b. calculate the profit at price = 68.50 pesos and at price = 47.10 pesos c. draw two conclusions (when the price is 68.50 pesos and when the price is 47.10 pesos) d. answer the question at the very bottom. Php2,000 Php700 Fized Input (Kariable Input (TP (Q) 1 0 17 39 71 106 1 0 1 2 3 4 5 6 7 8 9 134 147 156 156 154 MP . 17 22 32 35 28 13 9 0 -2 AP₁ Short run Production Relationships TFC TVC TC Physical units Monetary amounts Law of diminishing marginal productivity as more units of labor is added to a fixed unit of capital, its marginal productivity decreases. Objective of the Firm: maximize profit. Maximizing profit condition/Minimizing Loss Condition: MR = Price = MC MC AFC AVC ATC TR=Q'P TC= Q ATC Profit TR-TC Frice per unit = 68.50 pe @Price per unit = 47.10 pesos TR TC Profit TR TC Profit

Assuming a firrh has this short-run production data below, do the following: a. fill-in the rest of the table b. calculate the profit at price = 68.50 pesos and at price = 47.10 pesos c. draw two conclusions (when the price is 68.50 pesos and when the price is 47.10 pesos) d. answer the question at the very bottom. Php2,000 Php700 Fized Input (Kariable Input (TP (Q) 1 0 17 39 71 106 1 0 1 2 3 4 5 6 7 8 9 134 147 156 156 154 MP . 17 22 32 35 28 13 9 0 -2 AP₁ Short run Production Relationships TFC TVC TC Physical units Monetary amounts Law of diminishing marginal productivity as more units of labor is added to a fixed unit of capital, its marginal productivity decreases. Objective of the Firm: maximize profit. Maximizing profit condition/Minimizing Loss Condition: MR = Price = MC MC AFC AVC ATC TR=Q'P TC= Q ATC Profit TR-TC Frice per unit = 68.50 pe @Price per unit = 47.10 pesos TR TC Profit TR TC Profit

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

See similar textbooks

Similar questions

ACME Coal paid $5,000 to lease a railcar from the Reading Railroad. Under the terms of the lease, $1,000 of this payment is refundable if the railcar is returned within two days of signing the lease. 1. Upon signing the lease and paying $5,000, how large are ACME’s fixed costs? Its sunk costs? 2. One day after signing the lease, ACME realizes that it has no use for the railcar. A farmer has a bumper crop of corn and has offered to sublease the railcar from ACME at a price of $4,500. Should ACME accept the farmer’s offer?
FOREST owners are seeing the best returns for years as a result of snaring a greater share of the huge Chinese market, but some Kiwi sawmills are running short of logs as a result. In 2009, log sales to China were worth about $530 million, more than double the $236m the previous year, and volumes were also more than double levels in 2008. Log prices remained at historically high levels of about US$145 a cubic metre for A grade logs delivered to China, according to a report from PF Olsen. ...the Timber Industry Federation warns that timber prices are likely to rise at least 10 per cent, after recent log price rises of up to 15 per cent. Prices for logs kept going up. China has become a key log market for New Zealand and log exports are "way up and forest owners are quite happy", one big forest company executive said. Another forest investor Roger Dickie, of Roger Dickie NZ, said the "log market has definitely improved, quite dramatically in the last few months" as a result of the…
FOREST owners are seeing the best returns for years as a result of snaring a greater share of the huge Chinese market, but some Kiwi sawmills are running short of logs as a result. In 2009, log sales to China were worth about $530 million, more than double the $236m the previous year, and volumes were also more than double levels in 2008. Log prices remained at historically high levels of about US$145 a cubic metre for A grade logs delivered to China, according to a report from PF Olsen. ...the Timber Industry Federation warns that timber prices are likely to rise at least 10 per cent, after recent log price rises of up to 15 per cent. Prices for logs kept going up. China has become a key log market for New Zealand and log exports are "way up and forest owners are quite happy", one big forest company executive said. Another forest investor Roger Dickie, of Roger Dickie NZ, said the "log market has definitely improved, quite dramatically in the last few months" as a result of the…
(i) A business manager determines that t months after production begins on a new product,the number of units produced will be P thousand, where P(t) =6?2 + 5?(? + 1)2.What happens to production in the long run ?(ii) A ruptured pipe in a North Sea oil rig produces a circular oil slick that is y meters thick at adistance x meters from the rupture. Turbulence makes it difficult to directly measure thethickness of the slick at the source (where x = 0), but for x > 0, it is found thaty =0.5(x2 + 3x)x3 + x2 + 4x . Assuming the oil slick is continuously distributed, howthick would you expect it to be at the source?
1. The amount of fixed factory costs applied to the product during the first 6 months under absorption costing is? A. Over-applied by $20,000. C. Under-applied by $40,000. B.Equal to the fixed costs incurred. D. Under-applied by $80,000. 2. Reported net income (or loss) for the first 6 months under absorption costing is? A. $160,000 B. $0 C. $40,000 D. $(40,000) 3. Reported net income (or loss) for the first 6 months under variable costing is? A. $180,000 B. $40,000 C. $0 D. $(180,000)
An ice cream producer has fixed costs of Php 3,500,000 per month, and it can produce up to 15,000 ice cream tubs per month. Each tub costs Php 500 in the market while the producer faces variable costs of Php 150 per tub. a. What is the economic breakeven level of production? b. Calculate the ice cream producer’s monthly profits at full capacity. c. What would happen to the monthly profits if another ice cream producer entered the market, driving the price of ice cream tubs down to Php 350 per unit?
Siam Manufacturing has implemented several programs to improve its productivity. President and producer of Thai tea instant, has been able, with his current equipment, to produce 12,500 units this year and 10,500 units for last year. In this year, their product requires 13,200 labor hours, utilities of S8,250, and capital of $88,000 to process. For last year, their product requires 12,000 labor hours, utilities of $7,600, and capital of $83,000 to process. They have asked you to evaluate the firm's productivity by comparing this year's performance with last year's. Last year This YearOutput 10,500 units 12,500 unitsLabor hours 12,000 13,2000Utilities $7,600 $8,250Capital $83,000 $88,000what is the multi-factor percent change this year vs last year
1. Minimize short (K fixed atK ) and long run cost of the following production technologies: a. q = 6K1/4L1/3 b. q = 20K1/2L1/2 c. q = K2L3 2. Derive the Short Run and Long Run Marginal Cost functions and determine whether Marginal Cost is increasing or decreasing with output. Explain why. 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.
7-16. Economists at Jensen Enterprises used time-series data to estimate the following total cost function for the firm: TC=200-2Q+0.05 Where TC is total cost and Q is the output rate. a. Determine an equation for the average cost function. Plot this function, and find the output rate that minimizes average cost. b. Is the production process characterized by decreasing, constant, or increasing returns to scale? c. If the market price of output is $4.32 per unit, is there a scale of plant that would allow the firm to earn an economic profit or at least to break even?
True/False: 1. Implicit costs are those costs, which have been incurred in the past and cannot be recovered bycurrent decisions.2. It is possible for the economic profit and accounting profit to be equal to one another.3. If Ed<1, an increase in price leads to higher revenue.4. In the long run, at least some of the inputs should be variable.5. Production is a transformation of resources in to goods and services.
A firm faces the following costs: total cost of capital = $1,000; price paid for labor = $12 per labor unit; and price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,000 units of output? b. Now assume the firm improves its production process so that it can produce 6,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000 units of output? c. If units of output can always be sold for $1 each, then by how much does the firm’s profit increase after it improves its production process? d. Suppose that implementing the improved production process would require a one-time-only cost of $1,100. If the firm only considers this year’s profit, would…
Superior Metals Company has seen its sales volume decline over the last few years as the result of rising foreign imports. In order to increase sales (and hopefully, profits), the firm is considering a price reduction on luranium--a metal that it produces and sells. The firm currently sells 60,000 pounds of luranium a year at an average price of $10 per pound. Fixed costs of producing luranium are $250,000. Current variable costs per pound are $5. The firm has determined that the variable cost per pound could be reduced by $.50 if production volume could be increased by 10 percent (fixed costs would remain constant). The firm's marketing department has estimated the arc elasticity of demand for luranium to be 1.5. a) How much would Superior Metals have to reduce the price of luranium in order to achieve a 10 percent increase in the quantity sold? b) What would the firm's (i) total revenue, (ii) total cost, and (iii) total profit be before and after the price…