Suppose that the monthly market demand schedule for Frisbees is listed below: Price $8 $7 $6 $5 $4 $3 $2 Quantity demanded 1,000 2,000 8,000 16,000 32,000 64,000 Suppose further that the marginal and average costs of Frisbee production for every competit Rate of output 100 200 300 400 500 600 Marginal cost $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 Average total cost $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 Finally, assume that the equilibrium market price is $4 per Frisbee. (a) Identify this firm's profit-maximizing rate of output. Instructions: Enter your response as a whole number. units of output (b) Draw the market demand curve. Prev 9 of 9 Next DELL

Suppose that the monthly market demand schedule for Frisbees is listed below: Price $8 $7 $6 $5 $4 $3 $2 Quantity demanded 1,000 2,000 8,000 16,000 32,000 64,000 Suppose further that the marginal and average costs of Frisbee production for every competit Rate of output 100 200 300 400 500 600 Marginal cost $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 Average total cost $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 Finally, assume that the equilibrium market price is $4 per Frisbee. (a) Identify this firm's profit-maximizing rate of output. Instructions: Enter your response as a whole number. units of output (b) Draw the market demand curve. Prev 9 of 9 Next DELL

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
The market for apple pies in the city of Ectenia iscompetitive and has the following demand schedule:Price Quantity Demanded$1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0Each producer in the market has fixed costs of $9 andthe following marginal cost schedule:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost andaverage total cost for each quantity from 1 to6 pies.b. The price of a pie is now $11. How many pies aresold? How many pies does each producer make?How many producers are there? How much profitdoes each producer earn?c. Is the situation described in part (b) a long-runequilibrium? Why or why not?d. Suppose that in the long run there is free entryand exit. How much profit does each producerearn in the long-run equilibrium? What isthe market price? How many pies does eachproducer make? How many pies are sold inthe market? How many pie producers areoperating?
1. Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs ofproduction. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is R300,000. Identify the type of this production function and Illustrate it with a 2D graph. 2. If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for smartphones, compute the number of phones that would be bought and sold at equilibrium.
Clancy is a hard-working college senior. One Sunday, he decides to work nonstop until he has answered 100 practice problems for his economics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem. Time Total Problems Answered 8:00 AM 0 9:00 AM 40 10:00 AM 70 11:00 AM 90 Noon 100 The marginal, or additional, gain from Clancy’s first hour of work, from 8:00 AM to 9:00 AM, is problems.
The market for apple pies in the city of Ectenia is competitive and has the followingdemand schedule:Price Quantity Demanded$ 1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0 ch producer in the market has fixed costs of $9 and the following marginal cost:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost and average total cost for 1 to 6 pies.b. The price of a pie is now $11. How many pies are sold? How many pies does eachproducer make? How many producers are there? How much profit does eachproducer earn?c. Is the situation described in part (b) a long-run equilibrium? Why or why not?d. Suppose that in the long run there is free entry and exit. How much profit does eachproducer earn in the long-run equilibrium? What is the market price? How many piesdoes each producer make? How many pies are sold in the market? How many pieproducers are operating?
A grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The current allocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of $800 (MCev = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCc = $1200). Explain whether the grower should move one ton of production from the Edna Valley to Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistent with the idea of the equimarginal principle. Make sure to use the correct terms and units.
A textile firm in a competitive industry employs a particularly efficient manager torun the operations at its production facility. In the textile industry, a plant managertypically makes a salary of $4,500 per month. The textile firm employing thesuperior manager faces the LAC and LMC curves shown in the figure below. Inlong-run competitive equilibrium, the price of the product is $9 A- typical textile firm in this competitive industry has a minimum long-runaverage cost of $______. The typical textile firm earns economic profit of$______ B-The textile firm with the superior plant manager could earn economic profitof $___________ per month, if no rent is paid to the superior manager C-The superior plant manager is likely to earn a salary of $______ per month,$____________ of which is economic rent
For Problems 15-17It costs a company $500,000 to produce 1,000 treadmills. The company’s cost will be $500,350 if it produces an additional treadmill. The company is currently producing 1,000 treadmills. A) What is the firm’s average cost for 1,000 treadmills? B) What is the firm’s marginal cost for the 1,001 treadmill? C) A customer is willing to pay $200 for the 501st treadmill. Should the company produce and sell it? (Enter yes or no and briefly explain your reasoning)
Jonathan, Scott and Mitchell share a garage. All enjoy having the garage cleaned, regardless of who pays for cleaning. The graph below represents Jonathan, Scott and Mitchell’s individual demand for garage cleaning. The marginal cost of cleaning $3 per hour. The Lindahl prices for Jonathan, Scott and Mitchell are, respectively, $68/17, $17/17, and $4/85 per hour. $34/17, $17/17, and $0 per hour. None of these. $30/17, $15/17, $6/17 per hour. $0, $0, and $0 per hour.
Graph the total cost lines.b) Over what range of annual volume is each facility goingto have a competitive advantage?c) What is the volume at the intersection of the Edwardsvilleand Fayetteville cost lines?
Two months ago, on July 1, 2019, the State of Illinois raised gasoline taxes by $.19 (19 cents) per gallon of gas suppose the new tax is imposed on Illinois gasoline stations. Draw a graph, showing the new cost curves reflecting the additional 19 cents per gallon tax in place. Be sure to indicate which curves depict the pre-tax scenario and which depict the post-tax scenario (for example, by drawing them pre-tax and post-tax curves in different color and using clear labels) (Both a graph and a narrative are needed for this question)
Assume that the following marginal costs exist in catfish production: Quantity produced (units per day) 10 11 12 13 14 15 16 17 Marginal cost (per unit) $4 6 8 10 12 14 16 18 Price (per unit) $25 24 23 22 21 20 19 18 Quantity demanded (units per day) 10 11 12 13 14 15 16 17 Total revenue $Answer $Answer $Answer $Answer $Answer $Answer $Answer $Answer Marginal revenue $Answer $Answer $Answer $Answer $Answer $Answer $Answer (a) Complete the table above. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. (b) At what rate of output is MR = MC? Answer units (c) What price will a monopolist charge for that much output? $Answer (d) If the market were perfectly competitive, what price would prevail? $Answer (e) How much output would be produced?