Chris runs a shop that sells paper. Chris's consumers consider his products to be the same as his competitors and the market price is $250. The marginal cost of selling one ton a day is $100; the marginal cost of selling a second ton is $150; and the marginal cost of selling a third ton is $250. To maximize their profit, Chris should sell one tons a day Ofour tons a day ) three tons a day zero. Shut down and enter a different market two tons a day
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- Shakti Inc. has been granted a patent for its arnica toothache balm. The table to the right shows the demand and the total cost schedule for the firm. What is Shakti's profit minus maximizingoutput? A. 4 units B. 6 units C. 7 units D. 5 units Price per dose (Dollars) Quantity Demanded (Dose) Total Cost of Production (Dollars) $80 0 $80 72 1 82 64 2 88 56 3 100 48 4 124 40 5 164 32 6 208 24 7 268 16 8 340The table below shows the costs of a firm that produces handmade pottery vases in a competitive industry. Output AVC MC 1 3 3 2 2.50 2 3 2.17 1.5 4 1.93 1.2 5 1.74 1 6 1.67 1.3 7 1.71 2 8 2 4 9 2.44 6 10 3 8 The market price for a handmade vase is $3.75. To maximize its profit, this firm should produce vases.MonoMed, having a Patent on production of a medicine, has following Demand and CostSchedule: Price (Rs ): 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 In a Table calculate TR, MR, TC, AVC, ATC and MC at each price. Plot the Demand, Marginal Revenue MR, Average Total Cost ATC, Average Variable Cost AVC and Marginal Cost MC Curves of the Firm in a clearly labelled graph. Calculate the profit earned, if any and show the area on the firm’s graph. How would you define the market structure of MonoMed? What are the characteristics? Does the firm have pricing power? E) What will be the impact of the firm on societal welfare? Would there be welfare loss as compared to a competitive firm? If so, briefly explain. Support your answer using MonoMed’s graph in (b) above.
- The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Quantity of Ear Buds MC ($) ATC ($) 10 - 5.00 15 2.00 4.00 20 2.44 3.61 25 3.56 3.60 30 4.02 3.67 35 5.49 3.93 40 5.93 4.18 45 8.59 4.67 Instructions: In part a, enter your answer as the closest given whole number. In parts b–d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? _ pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? $ _ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? $ _ d. Now assume the market price is $5.50 per…MonoMed, having a Patent on production of a medicine, has following Demand and Cost Schedule : Price (Rs ) 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 d. Calculate the profit earned, if any and show the area on the firm’s graph.MonoMed, having a Patent on production of a medicine, has following Demand and Cost Schedule : Price (Rs ) 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 In a Table calculate TR, MR, TC, AVC, ATC and MC at each price
- ADJ Enterprises produces hydrothermocorticoids. The table below shows the costs of producing various quantities of hydrothermocorticoids. Quantity Total Cost Average Cost 0 $0 -- 1 $10 $10.00 2 $12 $6.00 3 $15 $5.00 4 $19 $4.75 5 $24 $4.80 6 $30 $5.00 7 $45 $6.43 ADJ sells its hydrothermocorticoids for $5 each (that is the price regardless of the number of hydrothermocorticoids it sells). Use the Profit-Maximizing Rule to explain the quantity that ADJ should produce to maximize its profits. You may use a calculator. You should explain the details of any calculation you perform. You should identify, explain, and apply the concept you use to answer this question. To receive full credit, your explanation must show all steps in any calculations you perform. Your explanation must also incorporate the profit-maximizing rule – state what that rule is and explain how it applies to ADJ’s situation. Note that it is…cc4. a)What is the largest number of thingamabobs that can be produced and sold for Yaster Inc. to break even? thingamabobs. Round to the nearest thingamabob. b)How many thingamabobs should Yaster Inc. produce and sell in order to maximize profit? thingamabobs. Round to the nearest thingamabobs.Below we the market demand for a good, and the total cost of producing various levels of quantities by the industry. This problem is a theoretical example of Cournot Competition, where firms choose quantities to produce, and end up selling at whatever price the market is willing to pay for the total industry output. For simplification purposes, firms have no fixed costs, and a constant MC and ATC.a. Complete the table. Quantity Price TR MR TC MC ATC Profit 0 $14 — 0 — — 10 $11 10 20 $8 20 30 $5 30 40 $2 40
- There are only two driveway paving companies in a small town, Asphalt, Inc. and Blacktop Bros. The inverse demand curve for the services is ? = 2040 − 20?where quantity is measured in pave jobs per month and price, in dollars per job. The firms have an identical marginal cost of $200 per driveway. If the two firms collude, splitting the work and profits evenly, how many driveways will each firm pave, and at what price? How much profit will each firm make? Does Asphalt have an incentive to cheat by paving one more driveway each month? Show it numerically.Is what kind of market Resturants and video Rental store operate. Justify your answer. Would the firms that provide insuarance and cellular servise operate in same kind of market.Explain.6. A firm manufactures and markets a product that sells for Birr 20 per unit. Fixed costs associated with activity total Birr 40,000 a month, while variable cost per unit is Birr 10. A maximum of 10,000 units can be produced and sold. Required: a) Drive the TR, TC and Total profit functions. b) Sketch the TR, TC and Total profit functions in the same coordinate system. c) What is the Break-even point (in terms of quantity and sales volume)? d) Drives the new TC, Total profit functions given that FC is increased by Birr 10,000 a month, and calculate the new break-even point. e) Drive the new TC and Total profit functions given that unit variable costs is decreased by 20% and calculate the new Break-even point. f) Drive the new TR and Total profits functions given that the unit selling price increases by 20% and calculate the new break-even point. g) What is the relationship that you may inter from BEP& FC, P& BEP and V& BEP? h) Assume selling prince increases by 10%…
