Suppose you own a small business. Last month, your total revenue was $8,800. In addition, you paid $3,500 in monthly rent for office space, $300 in monthly rent for equipment, $2,500 to your workers in wages for the month, and $1,900 for the supplies you used that month. If you correctly determine that your economic profit last month was $200, then it must be true that your implicit costs are $3,600 per month. your implicit costs are $600 per month. your implicit costs are $400 per month. your implicit costs are $1,800 per month.
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Suppose you own a small business. Last month, your total revenue was $8,800. In addition, you paid $3,500 in monthly rent for office space,
$300 in monthly rent for equipment, $2,500 to your workers in wages for the month, and $1,900 for the supplies you used that month. If you correctly determine that your economic profit last month was $200, then it must be true that
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- Refer to the figure below to answer the questions. 1.) A corn producer's profit is RM200 and is producing 100 bushels of corn. Then he must have a cost per bushel of __________. 2) A corn producer produces 80 bushels of corn and sells each bushel at RM5. The cost of producing each unit bushel is RM2. This corn producer's total revenue is ________ and profit is ________. 3) A corn producer's total revenue is RM1,000. If she sells each bushel of corn for RM5, she must be selling ________ bushels of corn.Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. Spreading overhead is the process of dividing total fixed costs by more units of output, which implies that average fixed cost declines as quantity declines.Beta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q^2. a. What are the firm's fixed costs? b. What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10 c. How much should this firm charge for the product? d. What is the optimal level of output to maximize profits? e. How much profit will be earned? f. In the long run, should this firm continue to operate or shut down? Why? *Please show all work*
- Market research for a certain ice cream company indicates that if the price per cup of ice cream is P50.00, the demand will be 1200 cups, whereas if the price is increased to P60.00, the demand will be 1100 cups. Therefore, at a production level of 200 cups of ice cream, the revenue generated by the company would be $130 for each additional cup of ice cream produced. Now, suppose it is known that the total cost of production of x cups of ice cream is given by C(x) = 3x + 25,500. (a) Find the value(s) of x at the break-even points. (b) Use marginal analysis to approximate the profit from the sale of the 500th cup of ice cream. Compare this value with the exact profit from the sale of the 500th cup.A restaurant frequently offers a special prix fixe meal and has been charging $120 per person for the event. At that price, they’ve been averaging 40 customers each time. Their marketing firm has convinced them that they’ll gain a customer for every dollar they lower the cost of the event, and conversely lose a customer for every dollar they raise the cost. Their fixed cost per event is $$1200 and preparing each customer’s meal costs an additional $30. What are the break-even points in terms of customers served? Write the exact answer. Do not round. Separate multiple answers with a comma.Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. Spreading overhead is the process of dividing total fixed costs by more units of output, which implies that average fixed cost declines as quantity declines. Diminishing returns, or decreasing marginal product, imply diminishing marginal cost. At the output level where MR = MC, if the corresponding P is above AVC but below ATC, the loss-minimizing move is to shut down or stop production. A firm that is breaking even, or earning a zero level of profit, is one that is earning exactly a normal rate of return, which implies that new investors are not attracted, but current ones are not running away either. Zero economic profit implies zero accounting profit. In the long run, if price is below average total cost, then it pays to just shut down. The shapes of long-run cost curves follow directly from the assumption of a fixed…
- Refer to the figure below to answer the questions. 1.1) This corn producer produces 100 bushels of corn and sells each bushel at RM5. The cost of producing each bushel is RM2. This corn producer's total revenue is ________ and profit is ________. (1M) 1.2) This corn producer earns a total revenue of RM900. Each bushel of corn is sold for RM5. This corn producer must be selling ________ bushels of corn. (1M) 1.3) A corn producer's profit is RM200 and is producing 100 bushels of corn. Then he must have a cost per bushel of __________. (1M) 1.4) A corn producer produces 80 bushels of corn and sells each bushel at RM5. The cost of producing each unit bushel is RM2. This corn producer's total revenue is ________ and profit is ________. (1M) 1.5) A corn producer's total revenue is RM1,000. If she sells each bushel of corn for RM5, she must be selling ________ bushels of corn. (1M)In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shut-down price for a hypothetical business in a perfectly competitive market, and determine if that business would incur an economic profit at various market prices, and should the firm continue to produce at each of those price levels. Questions Table 2.a. shows an LED light bulb manufacturer’s total cost of producing LED light bulbs. Table 2.a. Cases of LED light bulbs produced in an hour Total Cost 0 $4,500 10 $4,900 20 $5,100 30 $5,300 40 $5,400 50 $5,700 60 $6,700 70 $7,900 80 $9,700 90 $11,800 1. What is this manufacturer’s fixed cost? Explain why. 2. Assuming that you only know…What costs and revenues do economists include when calculating profit that accountants don’t include? Economists and accountants calculate profit with the same costs and revenues. The only difference is that economists work with predicted costs and revenues for the future, whereas accountants work with costs and revenues from previous years. In addition to the explicit costs and revenues used by accountants, economists include all implicit costs and revenues when calculating profit. This means that they include opportunity costs and changes in the value of any assets owned by the firm. In addition to the implicit costs and revenues used by accountants, economists include all explicit costs and revenues when calculating profit. This means that they include labor costs and changes in the value of any assets owned by the firm. In addition to the explicit costs and revenues used by accountants, economists include all implicit costs and revenues when calculating…
- Midtown Manufacturing Company makes trash cans and plastic buckets, both of which requires labor hours along with time on two machines. Producing a unit of trash cans requires 50 hours of labor, 5 hours on Machine A, and 10 hours on Machine B, while producing a unit of buckets requires 20 hours of labor, 8 hours on Machine A, and 2 hours on Machine B. The Company has available 2000 labor hours, 560 hours for Machine A, and 350 hours for Machine B. Each unit of trash cans brings in $20 in profit for the company and each unit of buckets brings in $3 in profit. Be sure to write out the system of inequalities expressing these conditions and graph the feasible region. Find the profit maximizing combinations of trash cans and buckets this company can and should produce.Consider a simple three-step manufacturing process as illustrated in the figure given. Assuming the demand is 1,000 units, what is the input needed to meet the demand? Suppose the cost of loss is $5 in process 1, $10 in process 2, and $US 15 in the process 3. The defect rates are 3%, 5% and 7%, respectively. Calculate the total cost of the loss in the system provided and in the system where the scrap rates are reversed. which system would be preferable?an American multinational that sells consumer electronic products, has manufacturing facilities in three countries: Brazil, Thailand, and Canada. The average hourly wage rate, output per worker, and annual overhead cost for each location are as follows: Given the above figures, is Storm currently allocating its production resources optimally? If not, what should it do? Justify your answer. Now, suppose that Storm is planning to consolidate all its manufacturing into one facility. Where should it locate? Justify your answer.