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Evaluate the view that the main goal of firms will always be profit maximization.
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- 7 With the aid of a diagram, explain the profit maximising rule and explain four reasons why firms aim to profit maximise. Why might profit maximisation not be possible? (At least three developed points) What other business objective, besides profit maximisation may firms have and why might this be the case? Use a diagram and develop at least three points7) Refer to Figure 13-15 to answer the following questions. What is the profit-maximizing output level? What is the profit-maximizing price? What is the average total cost at the profit-maximizing output level? What area represents the firm's profit? At which output level are economies of scale exhausted? Does this graph most likely represent the long run or the short run? Why?8. Critical analysis Q13 Suppose Raphael, the owner-manager of a local hotel, projects the following demand for his rooms: Price Quantity Purchased ($) (per Day) 90 200 135 180 180 140 The price elasticity of demand between $90 and $135 is_____ in absolute value. This means that if Raphael raises the price from $90 to $135, his total revenue will______ (rise/fall/constant). The price elasticity of demand between $135 and $180 is______ in absolute value. This means that if Raphael raises the price from $135 to $180, his total revenue will_________(rise/fall/constant) .
- Peloton article: Why do you think Peloton simultaneously raised subscription rates while lowering the price of the hardware (the bike)? Group of answer choices Their instructors threatened to go on strike. Their raw material costs went down. They know they have existing customers locked in (due to transaction specific investments), so they are holding them up while trying to attract new customers.What two ways can managers increase profitability? Question 7 options: 1) Matching competitors’ prices while gaining significant market share 2) Pursuing low cost strategies that add value to justify raising prices 3) Controlling production costs while lowering sales prices 4) Offering the lowest prices to customers while increasing sales volumeMultiple choice - microeconomics 39) A profit-maximizing firm in a competitive market produces small rubber balls. When the market price for small rubber balls falls below the minimum of its average total cost but still lies above the minimum of average variable cost, what happens to the firm? A. It will experience losses, but it will continue to produce rubber balls. B. It will be earning only accounting profits. C. It will be earning both economic and accounting profits. D. It will shut down. 38)
- Suppose that it takes 1 ton of fertilizer to produce 3 tons of peas. Prepare a table to show the net revenue that a farmer would receive from selling 3 tons of peas to the coop and buying 1 ton of fertilizer from the coop for locations at a distance of d = 1, 2, ..., 10 miles.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 writingSuppose that the firm’s demand curve indicates that at a price of $10 per unit, customers will demand 2 million units of its product. Suppose that management decides to pick both price and output; the firm produces 3 million units of its product and prices them at $18 each. What will happen?
- 48. Whenever there is an improvement in the technology, the supply of the products using that technology will__________. a. Decrease b. None of these. c. Remain the same d. IncreaseOnly typed answer and please answer correctly It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why wouldn't a firm expand its output to Q1? Group of answer choices a) Demand is not sufficient for consumers to buy Q1. b) The firm would suffer an economic loss at Q1 while it would break even at Q0. c) The firm's marginal revenue would be negative at Q1. d) The firm wants to maximize accounting profit rather than economic profit.Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. A. How much is the normal profit? (Use a whole number, no currency, no comma, no space