QUESTION 7 Given the accompanying table, what is the short-run profit-maximizing level of output for the firm? Output Total Revenue Total Cost $4 2 3 1 2 12 16 20 4 14 O 3 units O 4 units 2 units O 5 units
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- Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. Your aunt’s opportunity costs comprise * If your aunt thought she could sell $510,000 worth of merchandise in a year, what is your aunt’s accounting profit? *$10,000-$40,000$460,000$0Given the above situation, what is your aunt’s economic profit? *$10,000-$40,000$460,000$0Suppose a food company has both food and store divisions. The food divisionproduces burgers that are sold downstream at the store. Assume that the storesells 1,000 burgers at $10, 2,000 burgers at $9, 3,000 at $8, and so on up to10,000 burgers at $1. The price the food division charges for a burger is$3.50. What will be the profit-maximizing price for the entire company? How muchprofit will the company make? What is the revenue-maximizing quantity for thestore?2. September 2019/2020 Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies. (i) Calculate Tim’s accounting profit and economic profit. (ii) “I am not sure if I made the right decision to start this business.” says Tim. Comment on the above statement.
- Consider the following production and cost functionsq=〖(10K^(2/5)+5L^(2/5))〗^(5/2)1250=20K+8LWhich implies〖MP〗_K=10〖(10K^(2/5)+5L^(2/5))〗^(3/2) K^(-3/5)〖MP〗_L=5〖(10K^(2/5)+5L^(2/5))〗^(3/2) L^(-3/5)What is the profit maximizing combination of K and L?29. What do you understand by retained earning / Ploughing back of profit? State its advantages and disadvantages?Suppose for a single firm thatP = 15TC = 3Q + 2Q2 (a) What is the profit-maximizing quantity? (b) What is the profit at the profit-maximizing quantity? Only typed Answer
- Cost and revenue schedule: Please show your calculation for full credit. Output Price TR MR TC ATC MC Profit 0 $10 $5 1 $10 $7 2 $10 $8 3 $10 $10 4 410 $17 5 $10 $ 28 Please fill up this schedule. From the given information, draw the demand curve, MR, MC and ATC curve and figure out the output at which firm maximizes its total profit.10. If a firm is choosing to operate that means they have a a. positive accounting profit b. Positive or 0 economic profit c. Positive total revenue d. None of the above14-If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero Group of answer choices variable costs fixed costs opportunity costs total cost
- 8- A business is below the economic break-even point and above the operational break-even point. Therefore, it can be said that: *a) gives operating and economic profitb) gives economic profit and operating lossc) gives operating profit and economic lossd) causes economic and operational loss1] TEXplor has purchased a 2-year lease on land adjacent to the land leased byClampett. The land leased by TEXplor lies above the same crude oil deposit. Assume each company sinks wells of the same size at the same time. If both companies sinkwide wells, each will extract 2 million barrels in 6 months, but each company willreceive profit of only GHC 1 million. On the other if each company sinks a narrowwell, it will take a year for Clampett and TEXplor to extract their respective shares,but their profits will be GHC14 million apiece. Finally, if one company drills a widewell while the other company drills a narrow well, the first company will extract 3million barrels and the second company will extract only 1 million barrels. In thiscase, the first company will earn profits of GHC 16 million and the second companywill actually lose GHC 1million.1. Illustrate this using a normal form game. 2. Does either firm have a strictly dominant strategy? If yes, what is (are) thesestrategies?…Q3_A The Break even Analysis of firm show that: BEP = 1000 FC = 10,000 $ P = 3% of the quantity of zero profit. A) The point of intersection of TR with TC is at the cost point of $ 45,000 for TR. B) At the point where (zero units sold) TC equals $ 5,000 C) the start of the line drawing for TR is at cost point $ 0 D) the value UVC for the product in question equals $ 10) E)the FC value in a point for BFP equals $ 10,000 For the given choices, showing which one is True and which one is False, correcting the False ones and given a reasonable reason for the True. Write your answer below:
