Suppose a firm producing coffee provides you with the following information: Price = R100 Quantity = 150 units of coffee Cost of production = R9 500 7.3.1. Calculate the total revenue of the firm. (1) 7.3.2. Is the firm currently making a profit or a loss? Explain. (2)
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Suppose a firm producing coffee provides you with the following information:
Price = R100
Quantity = 150 units of coffee
Cost of production = R9 500
7.3.1. Calculate the total revenue of the firm. (1)
7.3.2. Is the firm currently making a
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- At its current level of production, a profit-maximizing firm in a competitive market receives $15.00 for each unit it produces and faces an average total cost of $13.00. At the market place of $15 per unit, the firms marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. What is the firms current profit? What is likely to occur in this market and why?At its current level of production, a profit-maximizing firm in a competitive market receives $12.50 for each unit it produces and faces an average total cost of $10. At the market price of $12.50 per unit, the firm’s marginal-cost curve crosses the marginal-revenue curve at an output level of 1000 units. What is the firm’s current profit? What is likely to occur in this market, and why?A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2 What are the firm’s short-run profits? What adjustments should be anticipated in the long run? Given these adjustments, calculate the new optimal quantity and price.
- Assume that price is greater than average variable cost. If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should continue producing at the current output. produce a larger level of output. produce a smaller level of output. not enough information given to answer the question.Bavarian Crystal Works designs and produces crystal wine decanters for export to international markets. The marketing manager of Bavarian Crystal Works estimates the demand curve for each month to be: P=1,000-0.0025Q Where Q is the number of wine decanters produced monthly. Bavarian Crystal Works also pays a lease for its factory and equipment every month in the amount of $1,000,000. Finally, the cost to produce each wine decanter is $200. What quantity would maximize profits? What is the optimal price for Bavarian Crystals to charge?Discuss the importance of price elasticity of demand, income elasticity of demand and cross price elasticity of demand to a sales manager selling soft drinks like Coca Cola If a firm faces the Marginal Cost schedule MC = 180 + 0.3Q2 and the MR schedule is MR = 540 = 0.6Q2 and that Total Fixed costs are $65. What is the maximum profit it can make? Assume that the second-order condition for maximum is met
- If the total cost of producing 11 units of output in this figure is $16, the firm's economic profit at 11 units of output is: $104. $72. $8. –$8.(Table: Barrels of Oil) Refer to the table. The change in profit from producing the second barrel of oil is ________, and the marginal cost from producing the seventh barrel of oil is ________.A firm in a competitive market receives $500 in total revenue and has marginal revenue of $10. What is the average revenue, and how many units were sold? Microeconomics - Mankiw
- For the following total-revenue and total-cost functions of a firm: TR=22Q - 0.5Q2 TC= (1/3)Q3 - 8.5Q2 + 50Q + 90 Determine the level of output at which the firm maximizes its total profit. Determine the maximum profit that the firm could earn.1. If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level? Explain your answer. 2. A business firm produces and sells a particular Variable cost is P30/unit. Selling price is P40 per unit. Fixed cost is P60,000. a. What is the break-even quantity and break-even point? Show your solution. 3. A manager makes the statement that output should be expanded as long as average revenue exceeds average Does this strategy make sense? Explain. 4. Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be Price of steel P17 per unit. Output (Q) TFC TVC TC MC TR MR Profit/Loss 0 500 0 1 500 50 2 500 90 3 500 140 4 500 200 5 500 270 6 500 350 7 500 450…Refer to Figure 14-10. When market price is P1, which area represents a profit- maximizing firm’s total profit or loss? a.(P2 –P1)×Q2;profit b.(P2 –P1)×Q1;loss c.(P3 –P1)×Q2;loss d.(P3 –P1)×Q1;profit