EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 24, Problem 2CTQ
To determine
Affect on price of Misteloe due to restricted entry.
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How would you characterize the nature of competition among small food companies? Are there submarkets with distinct competitive pressures? Are there important substitutes that constrain pricing? Given these competitive issues, how can an organic frozen foods producer be profitable?
Paulina sells beef in a competitive market where the price is $6 per pound. Her total revenue and total costs are given in the table
below.
Quantity of
beef (lb.)
0
1
2
3
4
Total revenue ($) Total cost ($)
0
4
(A) 1 pound
(B) 2 pounds
(C) 3 pounds
(D) 4 pounds
6
12
18
24
6
10
15
21
What is the profit-maximizing (or loss minimizing) quantity?
Profit ($)
Marginal
revenue ($)
Marginal cost
($)
Marginal
profit ($)
Paulina sells beef in a competitive market where the price is $6 per pound. Her total revenue and total costs are given in
the table below.
Quantity of
beef (lb.)
0
1
2
3
4
A
What is the profit-maximizing (or loss minimizing) quantity?
B
1 pound
2 pounds
3 pounds
Total revenue ($) Total cost ($)
0
4
6
6
12
10
18
15
24
21
D) 4 pounds
Profit ($)
Marginal
revenue ($)
Marginal cost
($)
Marginal
profit ($)
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