EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 15, Problem 5SPPA
To determine
The calculation of quantity and firm's economic profit in the short run.
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Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:a. What is the profit-maximizing level of output? Calculate Apex’s profit.b. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?c. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?d. Comment on your answers to parts (2) and (3
Next question ice and cost (dolars per par)
The graph shows the long-run situation facing a producer of running shoes.
In the market for running shoes, all the firms face a similar demand curve and have similar cost curves
120-
Draw a vertical arrow that shows the firm's markup at the profi-maximizing quantity. Label R.
MC
t004
What is a fim's markup?
/ATC
A fem'u markup is the amount by which
exceeds
OA price; average total cost
60
OB. price, marginal cost
OC. average total cost marginal revenue
OD. average total cost marginal cost
20-
Describe the market of a firm in perfect competition
MR
O 25 7 100 1is e ths 200 zis
Quantity (pain of shoes per week)
A firm in perfect competition has
OA a markup similar to a firm in monopolistic competition
OB. no markup
> Draw only the objects specfied in the question
Oc. a negative markup
O D. a markkup similar to a monopoly
The figure below shows the demand and costs facing Mike's Bikes, a producer of
mountain bikes. What quantity does the firm produce and what is its price? Calculate
the firm's economic profit or economic loss.
Price and cost (dollars per bike)
400
350
300
250
200
150
100
50
MC
ATC
MR
100
200
Quantity (mountain bikes per week)
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$200 per bike, and economic loss is $10,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$250 per bike, and economic loss is $5,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$200 per bike, and economic profit is $5,000.
Quantity produced is 100 mountain bikes per week, price of a mountain bike is
$250 per bike, and economic profit is $5,000.
Chapter 15 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 15 - Prob. 1SPPACh. 15 - Prob. 2SPPACh. 15 - Prob. 3SPPACh. 15 - Prob. 4SPPACh. 15 - Prob. 5SPPACh. 15 - Prob. 6SPPACh. 15 - Prob. 7SPPACh. 15 - Prob. 8SPPACh. 15 - Prob. 9SPPACh. 15 - Prob. 10SPPA
Ch. 15 - Prob. 11SPPACh. 15 - Prob. 1IAPACh. 15 - Prob. 2IAPACh. 15 - Prob. 3IAPACh. 15 - Prob. 4IAPACh. 15 - Prob. 5IAPACh. 15 - Prob. 6IAPACh. 15 - Prob. 7IAPACh. 15 - Prob. 8IAPACh. 15 - Prob. 9IAPACh. 15 - Prob. 10IAPACh. 15 - Prob. 11IAPACh. 15 - Prob. 1MCQCh. 15 - Prob. 2MCQCh. 15 - Prob. 3MCQCh. 15 - Prob. 4MCQCh. 15 - Prob. 5MCQCh. 15 - Prob. 6MCQCh. 15 - Prob. 7MCQCh. 15 - Prob. 8MCQ
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