Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 24, Problem 14CQ
(a)
To determine
Filling of table with total revenue, marginal revenue, fixed cost and total cost.
(b)
To determine
Maximizing profit by charging price of $55
(c)
To determine
Price charging and output produced for maximizing the profit by estimating the demand and cost.
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Students have asked these similar questions
Output
AFC
AVC
ATC
MC
1
300
100
400
100
2
150
75
225
50
3
100
70
170
60
4
75
73
148
80
5
60
80
140
110
6
50
90
140
140
7
43
103
146
180
8
38
119
156
230
9
33
138
171
290
10
30
160
190
360
Refer to the chart above. If the market price is $179, the per-unit economic profit at the profit maximizing output is what?
15
23
33
39
Distinguish clearly between Marginal Revenue and Marginal Costs using suitable examples.
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is as indicated below.
Output
Fixed
Cost
Variable
Cost
Total
Cost
Marginal
Cost
Average
Cost
Average
Variable Cost
1
$250
$700
$950
$700
2
$250
$925
$1175
$225
3
$250
$315
4
$250
$360
5
$250
$400
6
$250
$450
7
$250
$550
If the company sells the computers for $550, is it making a profit or a loss? How big is the profit or loss?
If the firm sells the computers for $315, is it making a profit or a loss? How big is the profit or loss?
We expect the marginal cost to increase as this firm produces more computers. But when the firm shifts from producing 1 to 2 computers, marginal cost falls. What might explain this?
Chapter 24 Solutions
Economics: Private and Public Choice (MindTap Course List)
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