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- A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?Suppose the quantity of apples supplied in yourmarket is 2,400. If there are 60 apple producers,each with identical cost structures, how manyapples does each producer supply to the market?Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below. a.What is the level of profit for this firm at the profit maximizing output? b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find? c. What do you predict will happen in this market over the long run?
- a) A profit-maximizing business incurs an economic loss of $10,000 per year. Its fixed cost is $15,000 per year. Should it produce or shut down in the short run? Should it stay in the industry or exit in the long run? b) Suppose instead that this business has a fixed cost of $6,000 per year. Should it produce or shut down in the short run? Should it stay in the industry or exit in the long run?The diagram shows a price-taking bakery's marginal and average cost curves, and its isoprofit curves. The current market price for bread is P*= 2.50. Which of the following statements is correct? 8 Price, P (€); cost 4 3.70 2.50 2 0 0 Select one: 20 40 60 80 100 120 140 Quantity of loaves, Q 160 180 O a. The bakery is a price setter and sets its price as 2.50. b. The bakery maximises its profits by supplying 160 loaves. O c. The bakery's profit is 200. Marginal cost curve Isoprofit curve: €200 Isoprofit curve: €80 Firm's demand curve Zero-economic- profit curve (AC curve) 200 O d. The bakery's profit decreases until the quantity is 120, and then increases. e. The marginal cost curve is the bakery's supply curve.The following table displays the average cost of producing a good at different levels of output in the long run. Output (units) Average Cost ($) 940 190 980 140 1,020 120 1,060 110 1,100 110 1,140 125 1,180 145 if all the firms in the market have the same LRAC curve, what is the minimum level of output needed for a low-cost firm to compete in the market? Write the exact answer. Do not round.
- The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on this figure, which of the following statements are correct? 8,000 Price, Marginal cost ($) 0 E Quantity of cars, Q At A, the firm makes positive profits. The firm makes the same profit at B and D. O Profit margin is the same at B and D. O The slope of the isoprofit is zero at D. MC Isoprofit A Isoprofit B AC 100On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) PRICE (Dollars per lamp) 100 8 8 70 50 30 20 10 0 PRICE (Dollars per lamp) 90 Suppose there are 5 firms in this industry, each of which has the cost curves previously shown. 100 Demand 80 10 70 20 30 50 60 70 QUANTITY (Thousands of lamps) On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot these points in order from left to right, starting with the point closest to the origin. You are given more…A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?
- Consider the market for tilapia. Ripple Rock Fish Farms, a small family fishery in Ohio, and The Fishin’ Company, a large corporate supplier, are both producers of tilapia. The marginal cost curves for both firms are shown in the accompanying graph. a. Suppose the market price of tilapia is $2.50 per pound. Move point A to Ripple Rock’s quantity sold. Move point B to The Fishin’ Company’s quantity sold. b. How many pounds of tilapia do they collectively supply?________thousand pounds c. To achieve efficient production, The Fishin’ Company should supply _____ ("more", or "less", or "the same") it is currently producing, and Ripple Rock should supply __________ ("more", or "less", or "the same") it is currently producing.Suppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $28.00 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) Price (dollars per box) 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0 10 20 30 40 50 60 70 80 Output (boxes of peaches per day) MC ATC 90 100 oo QIn order to maximize profit, the firm will choose to produce where marginal revenue is equal to marginal cost
