Figure: Profit Max/Loss Min Price $16 14 12 10 8 6 2 At a price of $8, this firm should produce 10; loss O 0; loss O 0; profit 0 2 4 6 8 10 12 14 16 18 20 22 Quantity 10; profit MC units and will earn a ATC OAVC
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- Continuing from Exercise 7.1, the films factory sits on land owned by the firm that it could rent for 30,000 per year. What was the films economic profit last year?Why does entry occur?GivenMonthly rent25,000Monthly Salary/employee10,000Market price of slippers520Total units sold20,000 Solve for the followingTotal RevenueTotal CostProfit/Loss (indicate if its a profit or loss)
- 3. What is the reason of low barrel price of crude oil? 4. What is the role of Petroelum Engineer in Oil & Gas Industry? Note: write with type writtenLet a = 8 and k = 1. Compute the equilibrium prices, quantities and profits. .A firm produces two different kinds, A and B, of a commodity. The daily cost of producingx units of A and y units of B isC(x, y) = 2x2 − 4xy + 4y2 − 40x − 20y + 514Suppose that the firm sells all its output at a price per unit of $24 for A and $12 for B. Findthe daily production levels x and y that maximize profit. (Be sure to show your first andsecond order conditions.)
- 5 A firm should cease production if it is making losses. Explain with relevant diagrams.Maximize profit 4D + 3WWith constraintsTime 3D + 2W ≤ 150Cost 2D + 4W ≤ 220D, W ≥ 0 We saw the best point was (20, 45) with profit 215. Use this problem and the notes to answer the following (except part 4):1 write true or false and then explain either response to this – the range of optimality on the D variable refers to how much the value 20 in the best point can go down or go up and this point is still the best,2 write true or false and the explain either response to this – the range of feasibility of the time constraint refers to the value 150 and how much if can change and the best point is still (20, 45),3 write true or false and explain either response to this – the shadow price of .125 on the cost constraint means that if the right hand side of the constraint (the 220) is anywhere between 100 and 300 then each 1 unit increase in this RHS (say from 100 to 101) will increase profit by 12.5 cents and any 1 unit decrease in this RHS will decrease profit 12.5 cents,4 write true or…# 13 Aabir, a milk farmer, earns $300k per month in revenue. His monthly costs include Administrative costs $40k, Feed $60k, Equipment & maintance $40k, Labor $70k, Transportation $10k, Miscellaneous $20k. Foregone rent for the land used for the cattle grazing $10k. Value of his son's time that helps on weekends $2k, Owner's salary $ 10k, Aabir's accounting & economic profit respectively are: a.) 60k & 48k b.) 50k & 38k c.) 60k & 38k d.) 38k & 38k
- (a) Disinguish beween Direct and Indirect production (b) Explain any five (5) reasons why different firms produce different levels of outputshigher costsE4 P Q ARC POINT Total Revenue Marginal Revenue 7 100 6.5 200 6 300 5.5 400 5 500 4.5 600 4 700 3.5 800 3 900 2.5 1000 2 1100 1.5 1200 find the remaining values and writ the comments on the results?Question 4Charlie Co. sells pastries and its production and cost table is given below. A worker costs $100 a day, the firm has fixed costs of $200.L Q MP MC TC ATC0 01 202 503 904 1205 1406 1507 155a. Complete the table above b. Compare the average total cost and the marginal cost and explain therelationship c. Describe the methods that can be used to determine where profit is maximized?
