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The golden rule of profit maximization states that any firm maximizes profit by producing where:
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- Will a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D�) and supply curves (S=MC�=MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from perfect competition. Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows the demand (D), marginal revenue…Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows the demand (D), marginal revenue (MR), and…
- Determine the output level that will create zero economic profit.For the following total-profit function of a firm: = 144X – 3X² – XY – 2Y² + 120Y – 35 Determine the level of output of each commodity at which the firm maximizes its total profit.Determine the value of the maximum amount of the total profit of the firm.According to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?
- When is the law of diminishing marginal returns relevant? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a when a firm can change all of its inputs b when a firm can only change one of its inputs c when a firm is advertising d when a firm is not using all of its inputsIn order to maximize profit, the firm will choose to produce where marginal revenue is equal to marginal costIn the individual firm graph below, please circle the Golden Rule/profit maximizing/loss minimizing point on the individual firm graph. In the individual firm graph below, please circle the total cost at the Golden Rule/profit maximizing/loss level of output.
- The competitive firm isSuppose Jayden operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with a market price equal to $20 per phone case. The following graph shows Jayden's total cost curve. Jayden's profit is maximized when they produce a total of ____phone cases. At this quantity, the marginal cost of the final phone case they produce is ___, an amount ( greater or less)than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is ____, an amount(greater or less)than the price received for each phone case they sell. Calculate the marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points to plot marginal revenue and the orange points to plot marginal cost at each quantity.Microeconomics II is the most fun course you ever took. Explain? A profit-maximizing competitive firm uses just one input, x. Its production function is q= 4(x)^1/2. The price of out-put is $28 and the factor price is $7. The amount of the factor that the firm demands is?
