For output levels of 1, 2, 3, 4, 5 and 6 units, a competitive firm's total costs are $142, $172, $222, $282, $352 and $432 respectively. If market price is $45 per unit, how many units should the firm produce to maximize profit or minimize loss? A
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- Total output Total Cost 0 20 1 30 2 42 3 55 4 69 5 84 6 100 7 117 How much milk will Malik as an individual firm would supply in the market at the price of Rs. 14 per liter? How will the supply of milk be effected if the price rises to Rs. 16 per liter?To maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of False. ExplainWhat is the cheapest way of producing 850 units of output if a firm operates with theproduction function 0.5 0.5 Q = 30K L and can buy input K at 75 $ per unit and L at 40 $per unit?
- Assume that a firm’s marginal revenue curve intersects the rising portion of its marginal cost curve at 500 units of output. At this output level, a profit-maximizing firm’s total cost of production is $1,000. If the price of the product is $5 per unit, the total revenue earned by the firm will be:A manufacturing firm faces the cost of production as follows : Quantity Total Fixed Costs Total Variable Costs 0 $ 100 0 1 $ 100 $ 40 2 $ 100 $ 60 3 $ 100 $ 80 4 $ 100 $ 130 5 $ 100 $ 190 6 $ 100 $ 350 (a) Calculate the company's average fixed costs, average variable costs, average total costs,, and marginal costs at each level of quantity larger than zero (b) Suppose the price of the firm's product is $ 90, what is the firm's optimal production quantity? What is the firms profit under this quantity?The cost function for Acme Laundry is C(q)=50+30q+q2, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p?
- If a retail clothing shop has to pay monthly rental of A$10,000 and has variable costs of A$20,000 for 200 units of sales per month, what minimum price must it sell its goods in the market in the short-run and the long-run for the shop to continue operating?Consider a firm with a total cost function TC = q^2 + 20q + 225. a) In a diagram, measuring quantity along the horizontal axis, draw the firm’s Marginal Cost and Average Cost curves. Suppose that the government introduces a $10 per unit seller tax. b) What is the firm’s new total cost function? In the same diagram as above, illustrate how the tax affects the firm’s MC and AC curves. Does the tax affect the firm’s MC? Does it affect the firm’s minimum efficient scale? Suppose instead that the government introduces a new licensing fee that raises the firm’s recurring fixed cost to 400. C) In a new diagram draw the firm’s MC and AC before and after the introduction of the licensing fee. Does the fee affects’ the firm’s MC? Does it affect the firm’s minimum efficient scale?Q.No.3. Consider the production function: (3) Y = 0.75X + 0.0042X2 – 0.000023X3 (a) At what level of X, the output will be maximum? (b) If input price is 0.15$ and output price is 4$ then at what level of X, profit will be maximum?
- If the fixed cost of producing output Y is P150,000, variable cost is P300 per unit and the price of Y is P600 per unit, suppose the price of Y decreases by 25%, ceteris paribus, should the farmer continue producing 500 units of output? Explain why or why not.Rasiah's Garden of fruit is a firm selling fruits in a perfectly competitive market. Total fixed cost is RM50, and the wage for labour is RM5 per worker. The estimated output produced and cost are as follows: Labour Output (Kg of fruits) usage 0. 0. 8. 10 12 20 17 30 24 40 33 50 44 60 57 70 Calculate the total variable cost, average total cost, average variable cost, marginal cost, total revenue and marginal revenue. b. If Rasiah's garden of Fruits sells a kilo of fruit for RM3.50, how many Kg of fruit (output) should the firm sell in order to maximise profits, and how much profits would the firm make?Question 1 . In 2004, the country of Lesotho in southern Africa made most of its export earnings, 90% in 2004, from garment and textile factories. Many of these clothing items, particularly t-shirts, were sold in the U.S. Sub Question a. Assume that the market for cotton textiles is perfectly competitive. Assume, also, that the market price for a t-shirt is $3 and the marginal cost function for a typical Lesotho textile factory is MC = .5 + .1Q (Q is in 1000’s of t-shirts). Solve for Q, the output of a typical Lesotho factory. Using a graph, illustrate the long run equilibrium for this Lesotho garment factory in 2004 (hint: you will need to graph the above two functions plus a hypothetical (but plausible) ATC function). Sub Question b. At the beginning of 2005, the U.S. ended textile quotas from China. This made it much easier for the U.S. to import inexpensive textiles, such as t-shirts, from China. Using S&D analysis, illustrate how the end of textile quotas on China would impact…
