Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 12, Problem 6P
To determine
(a)
The Calculation of Profit Maximizing Output.
To determine
(b)
The Calculation of Profit Maximizing Output.
To determine
(c)
The Calculation of Profit Maximizing Output.
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Complete the following table and identify the profit maximising and output.
b. What is true about marginal revenue and marginal costs when profit is maximized.
c. What would be the profit-maximizing level of output if price fell to $9?
Complete the following table and identify the profit-maximizing output. What is true about marginal revenue and marginal costs when profit is maximized?What would be the profit-maximizing level of output if price fell to $9?
Why is the level of output at which marginal revenue equals marginal cost the profit-maximizing output?
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- How much should the firm produce to maximize its profit? What is the firms AR? What is the firms MR? How much is the firms total revenue based on the profit maximization rule? How much is the firms total cost? How much is the firms total profit?arrow_forwardHenry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…arrow_forwardwhat is the profit-maximizing output quantity?arrow_forward
- Blue INK is the only cabel service provider in Gazipur. The diagram below depicts the price, output and costs incurred by Blue INK. Use the graph to answer the following questions: What is the Total revenue generated by Blue INK at the profit maximizing level of output?[ Answer in Numerical value only.i;e. 1,2,3,4,5] If the Cable Service Market turns into a Perfectly Competitive Market, what will be the total ammount of the service provided? [ Answer in Numerical value only] If the market turns into a Monopoly market again, what will be the total deadweight loss created? [ Answer in Numerical value only]arrow_forwardwhat is maximizing profit, and the answer to the attached? please give details.arrow_forwardWhich market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?arrow_forward
- True or false b. Charging a price greater than marginal cost leads to maximum efficiency c. In reality, few markets are perfectly competitive, and some loss of economic efficiency occurs in most markets d. Most markets are perfectly competitive and economists have found that there is no loss of economic efficiency in the U.S. economy.arrow_forwardMax barbershop is considering raining prices by $5 per haircut. Their current price for a cut is $23 abd babers receive 50% of the revenues for each haircut. Since Max is concerned about demand dropping due to the price increase, he is also planning to start advertising the shop on TV for $895 month. If current fixed cost are $11,576/month the current profit is $2000/month by what percent can demand decrease at the new price level and maintain current levels of profit on the business?arrow_forwardDescribe the difference between average revenue and marginal revenue. Why are both of these revenue measures important to a profit-maximizing firm? Explain how a firm in a competitive market identifies the profit-maximizing level of production. When should the firm raise production, and when should the firm lower production?arrow_forward
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