MICROECONOMICS LOOSELEAF W/CONNECT CODE
21st Edition
ISBN: 9781260263657
Author: McConnell
Publisher: MCG
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Chapter 10.3, Problem 2QQ
To determine
Changes in marginal cost and marginal revenue.
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Doug produced 100 donuts but only sold 90 of them. The average cost of production for each donut was $1. Each of the 90 donuts sold was sold for a price of $1.20. What was Doug's total revenue?
$108
$100
$8
$120.
Must complete chart and graph MR, MC, ATC, AVC, and where Q indicates max profit.
FOR CHART, FIND:
Mid-point AVG
Quantity
Total Revenue (pxQ)
Fixed costs calculations
Variable costs (wages x workers)
Total Costs (TC)
Total Profit (TR-TC)
AVC (VC/Q)
ATC (TC/Q)
Marginal Revenue (MR) (change in TR/ change in Q)
Marginal Cost (MC) (change TC/ change in Q)
Change in profit (MR-MC)
Explain the concepts of revenue, costs and profit.
Chapter 10 Solutions
MICROECONOMICS LOOSELEAF W/CONNECT CODE
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- Microeconomics 1. Burger King Senior Discount drinks 10% off (60+) plus discounts on coffee and soft drinks. This is an example of PRICE _________________________ 2. Walmart sold toys below cost. FAO Scharwtz, a rival toy store could not match the prices and went out of business. Wal mart was using _____________________________ Pricing.arrow_forward4.Average variable cost is found by dividing.............. a. variable cost by output b. output by variable cost c. marginal cost by output d. output by marginal cost 5. A profit maximizing firm will increase production a. price is less than marginal cost b. price equals marginal cost c. price exceeds marginal revenue d. price exceeds marginal cost 6. Which statement is true? a. Accounting profits are greater than economic profits. b. Economic profits are greater than accounting profits. c. Accounting profits are equal to economic profits...arrow_forwardProblem-3: Consider total cost and total revenue given in the following table. Quantity Total Cost Total Revenue 0 $15 0 1 20 8 2 29 26 3 39 50 4 50 65 5 64 79 6 80 92 7 95 100 Calculate profit, marginal revenue, marginal cost for each quantity? How much should the firm produce to maximise profit?.arrow_forward
- It costs a cookie firm $2 to sell a single cookie. This firm makes $4 in revenue from each cookie it sells. Assume this firm sells 20 cookies. What is its total profits?arrow_forwardCOURSE: ECONOMY A company has a total cost function TC = 80+3q+2q2 and a marginal cost function MC = 3+4q. If market price is P = $30 and it is producing 10 units:(a) Is firm maximizing its profits?b) What quantity should it produce in long run? Hint: MC= ATCc) Construct a table with all costs.d) Plot profit maximization points in short and long run.arrow_forwardConcept: Does Fairness Matter 1 In the presence of shortages, why would a firm, such as a restaurant with people waiting for a table or a theater with people waiting for a ticket, not raise prices when doing so would seem to increase profits? A. Increasing prices might result in short run gains at the expense of long run profits. B. Increasing prices might be seen as unfair. C. Increasing prices requires the firm to pay substantial "switching costs." D. Both a and b. E. All of the above.arrow_forward
- (MANAGERIAL ECONOMICS) Show algebraic solution please Assume that B = -Q 2 + 4,500Q and C= 2Q 2 are the benefits and costs of increasing the units of X-brand energy drink (in a 500 ml bottle). A. What is the profit function of X-brand energy drink production?arrow_forwardFigure 7.1 shows a firm’s total revenue and total cost curves. If the firm were producing Q1, it should a. expand output to Q2 to maximize profit. b. reduce output to zero to maximize profit. c. expand output to Q3 to maximize profit. d. expand output beyond Q3 to maximize profit. e. continue to produce Q1, which is the profit-maximizing output.arrow_forwardGive typing answer with explanation and conclusion 1.Sara knits 20 scarves and sells them for $25 each. What is her total revenue? $50 $250 $45 $500arrow_forward
- 3. When this firm is producing at the profit-maximizing price and quantity, its total revenue is $_______. 4. The total revenue when a firm is profit maximizing is $________. 5. The total cost when a firm is profit maximizing is $_________. 6. The profit when a firm is profit maximizing is $________.arrow_forward1. The profit maximizing output for this firm is . 2. In the short-run, this firm will earn $ 3. In the long-run, this firm will earn $ please refer to figure providedarrow_forward5. Study Questions and Problems #5 Suppose there is a decrease in the demand for high-definition televisions. What effect might this change have on the short-run average total cost curve for this product? _____ a) A decrease. When demand decreases, the short-run average total cost falls. b) An increase. When demand decreases, the short-run average total cost increases. c) No change. Demand determines the final price but not the costs for the product.arrow_forward
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