sider the accompanying graph, which depicts the cost ves of a perfectly competitive seller of potatoes. Potatoes rently sell for $3 per pound. To maximize profit, the potato grower should produce pounds of potatoes. Price & cost ($/poud) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1 MC 6 7 2 3 4 5 Quantity of potatos (in thousands) ATC AVC P 8 9 10 b. Suppose that the potato grower's bank ratchets up the interest rate applicable to the grower's adjustable-rate mortgage loan. This increases the size of the potato grower's monthly mortgage payment. Illustrate the change in the mortgage payment by shifting the appropriate cost curve or curves.

sider the accompanying graph, which depicts the cost ves of a perfectly competitive seller of potatoes. Potatoes rently sell for $3 per pound. To maximize profit, the potato grower should produce pounds of potatoes. Price & cost ($/poud) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1 MC 6 7 2 3 4 5 Quantity of potatos (in thousands) ATC AVC P 8 9 10 b. Suppose that the potato grower's bank ratchets up the interest rate applicable to the grower's adjustable-rate mortgage loan. This increases the size of the potato grower's monthly mortgage payment. Illustrate the change in the mortgage payment by shifting the appropriate cost curve or curves.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...

See similar textbooks

Similar questions

What two lines on a cost curve diagram intersect at the zero-profit point?
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations What is the accounting profit for the family farm?
Please no written by hand A profitable firm becomes unprofitable following the ban of cheap plastics used in its production. Show this on the cost and revenue graph, the profit graph, and the production graph. Be specific in your labels, indicating carefully the shifts in the curves, if any.( Hand graph please)
Suppose you are thinking about starting a lawn service in your area. The lawn service market can be considered perfectly competitive. You own a $200 lawnmower. You have a fixed cost of $90 (maintenance costs on the mower, etc.). Your variable costs are as follows: # of Lawns Mowed Total Variable Costs Fixed Cost 1 $5 90 2 $15 90 3 $30 90 4 $50 90 5 $75 90 6 $105 90 7 $140 90 8 $180 90 9 $225 90 10 $275 90 a) Calculate Total Costs, Average Total Costs, Average Total Costs, Average Variable Costs, and Marginal Costs. b) Suppose that the going rate for lawns is $35 per lawn. How many lawns would you mow?
Suppose a perfectly competitive firm is operating in short run. The information of MR, Q,ATC and AVC are 15 taka, 60 unit, 45taka and 35 taka respectively. Calculate firm’sprofit/loss and total fixed cost. From these calculations and based on all the giveninformation, can you conclude about the firm’s decision in short run? Explain your reasoningwith the help of a suitable diagram. Show all the relevant information in yourdiagram.[Q=profit maximizing output and MR=marginal revenue]