
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5arrow_forwardUsing price (P), quantity (q), and average total cost (ATC), define profit rate (per unit profit), and total profits? Now assume you own a small business. Explain the difference between economic profits and accounting profits as concerns your business. What does it mean to say economic profit equals zero for your business and why does the firm continue to operate if economic profit equals zero (normal profit)?arrow_forwardA young Thomas Edison makes 20 light bulbs a week in his dorm room. The parts for each light bulb cost $2.25. He sells each light bulb for $5.25. General Electric offers Thomas an executive job that pays $55.00 a week. Thomas’s weekly economic profit from making light bulbs is equal to: Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. $arrow_forward
- Tulip growing is perfectly competitive and all growers have the same costs. The market price is $25 a bunch, and each grower maximizes profit by producing 2,000 bunches a week. The average total cost is $20 a bunch, and the average variable cost is $15 a bunch. The minimum average variable cost is $12 a bunch. Please draw graphs where necessary. What is the economic profit that each grower is making in the short run? What is the price at the grower’s shutdown point? What is each grower’s economic profit at the shutdown point?arrow_forwardFind marginal profit when marginal revenue is $90 and marginal cost $50arrow_forwardConsider the following information about a business Rodriguez opened last year: price = $5; quantity sold = 15,233; implicit cost = $18,000; explicit cost = $33,000. What was Rodriguez's accounting profit and economic profit? Show your work.arrow_forward
- The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00 a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is (Click to select) falling rising at a minimum and the marginal cost of cheeseburger production is (Click to select) falling rising at a minimum . b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is (Click to select) falling rising at a minimum and the average total cost of cheeseburger production is (Click to select) falling rising at a minimum .arrow_forwardShould a company produce more goods when marginal revenue is greater than marginal costs? Explain.arrow_forwardIf a perfectly competitive firm's average total cost is less than the price, then the firm A) incurs an economic loss. B) makes an economic profit. C) makes zero economic profit. D) makes either zero economic profit or an economic profit depending on whether the marginal revenue is equal to or greater than the price. E) None of these answers is correct because the relationship between the price and average total cost has nothing to do with the firm's profit.arrow_forward
- A profit-seeking firm should expand its output so long as: marginal revenue exceeds marginal cost price exceeds average total cost marginal cost is not rising average total cost is not risingarrow_forwardCalculate the value of marginal cost when marginal revenue is $87 and the Marginal profit is $20arrow_forwardConsider the following costs of a typical firm in a purely competitive industry. The firm has no fixed cost given only the available information, what would you except product price to be in the long run?arrow_forward
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