Consumers in Carlandia are willing to purchase up to 100,000 cars each year. Suppose the accompanying graph represents the long-run average cost curve for auto producers in Carlandia. Costs ($/unit) $40,000 30,000 20,000 10,000 LAC Quantity (thousands) 10 20 30 40 50 60 70 80 90 100, Goolsbee et al., Microeconomics, 3e, © 2020 Worth Publishers a. If the supply side of Carlandia’s auto market has 10 b. If the supply side of Carlandia's auto market is identical firms operating, what is the lowest potential served by a monopolist, what is the lowest potential price that consumers might be able to purchase a car price that consumers might be able to purchase a car for? for? $20,000 $30,000 $10,000 $40,000 $30,000 $10,000 $40,000 $20,000

Consumers in Carlandia are willing to purchase up to 100,000 cars each year. Suppose the accompanying graph represents the long-run average cost curve for auto producers in Carlandia. Costs ($/unit) $40,000 30,000 20,000 10,000 LAC Quantity (thousands) 10 20 30 40 50 60 70 80 90 100, Goolsbee et al., Microeconomics, 3e, © 2020 Worth Publishers a. If the supply side of Carlandia’s auto market has 10 b. If the supply side of Carlandia's auto market is identical firms operating, what is the lowest potential served by a monopolist, what is the lowest potential price that consumers might be able to purchase a car price that consumers might be able to purchase a car for? for? $20,000 $30,000 $10,000 $40,000 $30,000 $10,000 $40,000 $20,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 4SCQ: Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the...

See similar textbooks

Similar questions

Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
Would you consider an interest payment on a loan to a film an explicit or implicit cost?
If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?
What is the difference between a fixed input and a variable input?
A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
In choosing a production technology, how will firms react if one input becomes relatively more expensive?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
Monique has a flock of six chickens in her backyard that she initially bought for $6 each. Theflock currently lays 20 eggs per week, which Monique and her family consume at home, andher current cost of feed is $2 per week. Monique has a job that pays $8/hour with flexiblehours, but she is thinking of selling her chickens’ eggs to earn extra income. To start sellingeggs, she would need to increase production to 30 eggs per week. She can do this by increasingthe chickens’ feed to $3 per week and taking an hour off work each week to devote to chickenrearing. If the market price of her farm-fresh eggs is $1 per egg, what would be Monique’sweekly economic profits from selling her chickens’ eggs? (Select one from below) (a) −$9: This is her revenue minus her accounting cost.(b) −$1: This is her revenue minus her production cost.(c) $0: Eggs are a constant-cost market so producers must earn 0 profits.(d) $1: This is her revenue minus her economic cost.(e) $7: This is her revenue minus her…
The table below shows the cost data of a furniture manufacturer named Cindy’s Custom Made.a) Complete the table, assuming that labour and materials cost $8 an hour. For all $ amounts, round your answers to the nearest whole number. Outputof Chairs TotalHours AverageHoursper Chair MarginalHoursper Chair TVC($) AVC($) TFC($) TC($) ATC($) MC($) 1 6 180 2 8 3 9 4 16 5 25 6 36 b) What is the most productive output? Most productive output: chairs.c) What are AVC and ATC at this quantity? AVC: $ ATC: $ d) What is the output at economic capacity? Economic capacity: chairs. The table below shows the cost data of a furniture manufacturer named Cindy’s Custom Made.a) Complete the table, assuming that labour and materials cost $8 an hour. For all $ amounts, round your answers…
In your city , each police officer has a budgetary cost of $40000 per year. The property loss for each burglary is $4000. The first offecer hired will reduce crime by 40 burglaries and each additional officer will reduce crime by half as much as the previous one. How many officers should the city hire ? Illistrate with a graph with a marginal benifit curve and a marginal cost curve Can someone answer this correctly with an MC and MB graph? 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.