LSC CUMBERLAND EC202 MICRO>PKG<
21st Edition
ISBN: 9781260586992
Author: McConnell
Publisher: MCG
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Question
Chapter 14.2, Problem 4QQ
To determine
Relevance of elasticity.
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A profit-maximising firm in a competitive market is currently producing 1,000
units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000.
a) What is its profit?
b) What is its marginal cost?
c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?
3. A firm faces the demand equation p = 190 – 0.6q and the total cost function
TC = 40 + 30q + 0.4q²
a. Find the profit-maximizing quantity of output.
b. Confirm that this quantity represents maximum profits.
C.
Find the price that corresponds to this quantity.
1c. Using Excel or grid paper, based on the above information, plot the demand curve, MR curve, MC curve and ATC curve. Label the profit-maximizing quantity and price, total cost, total revenue and profit.
Chapter 14 Solutions
LSC CUMBERLAND EC202 MICRO>PKG<
Ch. 14.2 - Prob. 1QQCh. 14.2 - The D2e segment of the demand curve D2eD1 in graph...Ch. 14.2 - Prob. 3QQCh. 14.2 - Prob. 4QQCh. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - Prob. 6DQ
Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQCh. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - Prob. 14DQCh. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3P
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