Firm ABC is operating on an inelastic portion of its demand curve. Can a profit maximizing firm operate on an inelastic portion of their demand? Briefly explain.
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Firm ABC is operating on an inelastic portion of its
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- 6 In 1916, Henry Ford was quoted as saying the following: "There are men who will pay $360 for a car who would not pay $440. We had in round numbers 500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars, more employment of labor, and in the end we get all the total profit we ought to make." If Ford's estimate as correct, what was the price elasticity of demand for his cars? By how much did total revenue increase? 7 Using the data from question 6, above, write the demand curve equation for Henry Ford's cars. 8 Using the demand curve equation from question 7, build a graphic to sell Ford cars to the public in 1916.6 In 1916, Henry Ford was quoted as saying the following: "There are men who will pay $360 for a car who would not pay $440. We had in round numbers 500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars, more employment of labor, and in the end we get all the total profit we ought to make." If Ford's estimate as correct, what was the price elasticity of demand for his cars? By how much did total revenue increase?Briefly explain how the total revenue for a profit-seeking firm is determined.
- Microeconomics Q193515 Deadline passed If the price (P) of maple syrup is $4.00 per can, average cost (AC) is $4.50 per can and average variable cost (AVC) is $3.00 per can, then to maximize profit or minimize loss the firm should: Answer approved2$1 Will be moved to archive within about 9 hours. Microeconomics Q194159 4 hours 26 min 1. Briefly discuss two major differences between the theory of perfect competition and the theory of monopoly. 2. What reasons make the demand curve of a perfectly competitive firm completely horizontal? Only state. 3. Represent the information below in an appropriately labelled diagram with the relevant curves, and decide whether the firm should continue production or shut down in the short run, using calculations. A perfectly competitive firm produces 100 mugs to maximize its profit. The average total cost (ATC) is 13 taka per mug and the average fixed cost (AFC) is 4 taka per mug when the firm produces 100 mugs. The…Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…using appropriate diagrams analyse the difference between a profit maximising firm and a profit satisficing firm given the firm faces a downward-sloping demand curve.
- The firm depicted by the graph below is producing q0 level of output. Given its costs, is the firm producing at the profit-maximizing/loss minimizing level of output? Briefly explain why or why not.On a graph, show the demand for Elixir water and Elixir Spring’s marginal revenue curve. What are Elixir’s profit-maximizing price, output, and economic profit?Graph the demand curve and the marginal revenue on one graph.
- Blue INK is the only cabel service provider in Gazipur. The diagram below depicts the price, output and costs incurred by Blue INK. Use the graph to answer the following questions: What is the Total revenue generated by Blue INK at the profit maximizing level of output?[ Answer in Numerical value only.i;e. 1,2,3,4,5] If the Cable Service Market turns into a Perfectly Competitive Market, what will be the total ammount of the service provided? [ Answer in Numerical value only] If the market turns into a Monopoly market again, what will be the total deadweight loss created? [ Answer in Numerical value only]Why LRATC curve is u-shaped? Under which market structure, firm operates at the downward sloping part of LRATC? Briefly explain the reason.Souvlaki Taverna is one of many restaurants in Athens, Greece which sell Souvlaki kebabs. All restaurants make the dish slightly differently. Use the following graph showing the demand (D), marginal revenue (MR), average variable cost (AVC), average total cost (ATC) and marginal cost (MC) curves of Souvlaki Taverna to answer the questions below. (a). The goal of Souvlaki Taverna is to maximize its profit. How many Souvlaki kebabs per day should it make? What price per kebab (in euros) should it charge? If Souvlaki Taverna maximizes its profit, how much is its total revenue? What about its total costs? What is its daily profit? What would the profit-maximizing output level of this business be if it operated in a perfectly competitive market instead? What price per kebab would it charge? Does the economic outcome in part (a) imply allocative efficiency? Why or why not? Does the economic outcome in part (a) imply productive efficiency? Why or why not?
