Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 23, Problem 6E
To determine
To calculate:
The accounting profit and economic profit.
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Students have asked these similar questions
Which of the following statements is true?
Accounting profit is always positive.
Economic profit is always positive.
Economic profit is greater than or equal to accounting profit.Incorrect
Accounting profit is greater than or equal to economic profit.
If a firm makes zero economic profit, then the firmA.has total revenues greater than its economic costs.B.must shut down.C.must have no fixed costs.D.has accounting profit equal to their implicit costs.
The following table shows the output and total cost for a firm in a purely competitive industry
Output
TC
AC
MC
0
40
1
95
2
115
3
130
4
150
5
175
6
210
7
260
8
330
Determine the fixed cost of the firm.
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- The following table shows the output and total cost for a firm in a purely competitive industry Output TC AC MC 0 40 1 95 2 115 3 130 4 150 5 175 6 210 7 260 8 330 Complete the tablearrow_forwardQ: Find the Marginal Revenue and Marginal Cost functions from the following equations 1. TR= Q3 – 6Q2 + 140Q + 750 2. TC= 35 + 5Q -2Q2 +2Q3arrow_forwardSuppose you run a small business in your building and you act also as a manager of your business. If you do not pay yourself a salary and rent of your building what effect will this practice have on the calculation of the firm’s accounting profit? Economic profit? Explain.arrow_forward
- What are total fixed costs for the Zonker Company? $0 $8 $12 $20 2. The marginal cost to the Zonker Company of producing the third unit of output is $__________ and the marginal cost of producing the sixth unit of output is $__________. $10; $25 $36; $93 $24; $81 $25; $40 3. If the market price is $15 per unit and Zonker can sell all it wants at that price, then Zonker maximizes profit in the short run by producing __________ units per week. 5 3 4 0 4. If the market price fell to $11 per unit, Zonker maximizes profit in the short run by producing __________ units per week. a. 1 b. 2 c. 3 d. 0 5. The lowest short run average total cost for Zonkers occurs when they produce ________ units per week. 2 3 4 5 6. if the price-taking firm in Exhibit 0126 is currently producing 6 units, then to maximize profits in the short run, it should keep producing 6 units increase production to 13 units increase production to 14 units increase production…arrow_forwardThe table below shows a short run situation is evident from: a)the linear marginal revenue function b)the constant price c)the increasing marginal cost d)the presence of positive costs at Q=0 e)the absence of marginal values at Q=0arrow_forwardIf the total cost of producing 11 units of output in this figure is $16, the firm's economic profit at 11 units of output is: –$8. $104. $72. $8.arrow_forward
- The maximum economic profit (or minimum economic loss) for the firm in the diagram above would bearrow_forwardFor the following total-revenue and total-cost functions of a firm: TR=22Q - 0.5Q2 TC= (1/3)Q3 - 8.5Q2 + 50Q + 90 Determine the level of output at which the firm maximizes its total profit. Determine the maximum profit that the firm could earn.arrow_forwardDecide whether a firm making short-run losses should continue to operate or shut down its operations.arrow_forward
- Which of the following costs are important to consider when making short run decisions for a firm * Sunk costs Fixed costs Variable costs All of the abovearrow_forwardHow many of the following will occur with a linear total revenue curve? (i) A linear cost curve (ii) A linear profit curve (iii) A single break-even point (iv) Increasing profits as output increases beyond the upper break-even point a.None b.Four c.Three d.One e.Twoarrow_forwardAt the profit-maximizing output level, the slopes of the revenue and total cost curves are not equal, that is; MR(*) < MC(*).Select one: True Falsearrow_forward
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