MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
6th Edition
ISBN: 9780134125886
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 16, Problem 16.2.12PA
Subpart (a):
To determine
Profit maximization.
Subpart (b):
To determine
Profit maximization.
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In the following graph, indicate the area representing the Red Robin restaurant's profit when the
demand curve is D, and the area representing its loss when the demand curve is D2.
1.) Using the rectangle drawing tool, shade in Red Robin's profit when demand is D₁. Label your
area 'Profit.'
2.) Using the rectangle drawing tool, shade in Red Robin's loss when demand is D2. Label your
area 'Loss.'
Carefully follow the instructions above and only draw the required objects.
Grapher
MacBook Air
Price (dollars per hamburger)
MC
ATC
Q
MR2
MR₁
Quantity (hamburgers per week)
D2
D1
Clear all
Check answer
Suppose Ginny runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20
per shirt.
The following graph shows Ginny's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven
(inclusive) that Ginny produces.
200
175
Total Revenue
150
Total Cost
125
Profit
100
75
50
-25
2
QUANTITY (Shirts)
TOTAL COST AND REVENUE (Dollars)
The images below show the first six items you see when you search ‘laptops’ in Google Shopping.
Discuss whether an individual laptop manufacturer is a price-taking or a price-setting firm.
Draw a diagram that illustrates the profit-maximising decision of an individual laptop manufacturer you discussed in the previous question. Fully label your diagram. You may make up numbers of simply use appropriate notations for the purpose of labelling your diagram. Briefly explain the key information of your diagram.
Chapter 16 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
Ch. 16 - What is the law of one price? What is arbitrage?Ch. 16 - Prob. 16.1.2RQCh. 16 - Prob. 16.1.3PACh. 16 - Prob. 16.1.4PACh. 16 - Prob. 16.1.5PACh. 16 - Prob. 16.1.6PACh. 16 - Prob. 16.2.1RQCh. 16 - Prob. 16.2.2RQCh. 16 - Prob. 16.2.3RQCh. 16 - Prob. 16.2.4RQ
Ch. 16 - Prob. 16.2.5RQCh. 16 - Prob. 16.2.6PACh. 16 - Prob. 16.2.7PACh. 16 - Prob. 16.2.8PACh. 16 - Prob. 16.2.9PACh. 16 - Prob. 16.2.10PACh. 16 - Prob. 16.2.11PACh. 16 - Prob. 16.2.12PACh. 16 - Prob. 16.2.13PACh. 16 - Prob. 16.2.14PACh. 16 - Prob. 16.2.15PACh. 16 - Prob. 16.2.16PACh. 16 - Prob. 16.2.17PACh. 16 - Prob. 16.2.18PACh. 16 - Prob. 16.3.1RQCh. 16 - Prob. 16.3.2RQCh. 16 - Prob. 16.3.3RQCh. 16 - Prob. 16.3.4PACh. 16 - Prob. 16.3.5PACh. 16 - Prob. 16.3.6PACh. 16 - Prob. 16.3.7PACh. 16 - Prob. 16.3.8PACh. 16 - Prob. 16.3.9PACh. 16 - Prob. 16.3.10PACh. 16 - Prob. 16.3.11PACh. 16 - Prob. 16.3.12PA
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- coit ad Fifai oriens diss ܠܫܐ -D. Prufe maximirudcn uni hharat-ade mariet prioris ܗ ܕ Sapietne Sarei nuts a imal haats that manum: a Are a e $$ gar Hat The following graph shows Dames total cost curve Use the blue points (circle symbel) to plot total revenue and the green points (triangle symbol) to plat profft for shirts quanties zero through sever (inclusive) that Darnell produces A< ¥UAnd 10 Tripl ܡܢܐ ܕ ܚ ܠܚܝܬ Total Co ܀ ܀arrow_forwardCalculate Iyana's marginal revenue and marginal cost for the first seven rompers they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per romper) 40 35 30 25 20 15 10 0 0 1 2 3 4 5 6 7 8 QUANTITY (Rompers) Marginal Revenue Marginal Cost ? Iyana's profit is maximized when they produce a total of is $ , an amount rompers. At this quantity, the marginal cost of the final romper they produce than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is $ , an amount than the price received for each romper they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the Because Iyana is a price taker, the previous condition is equivalent to curves.arrow_forward3. Profit maximization using total cost and total revenue curves Suppose Rian operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a market price equal to $20 per romper. TH The following graph shows Rian's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero through seven (including zero and seven) that Rian produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 -25 DO 0 1 2 3 5 QUANTITY (Rompers) 4 6 Total Cost 7 8 Total Revenue Profit ?arrow_forward
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