Microeconomics For Today (MindTap Course List)
9th Edition
ISBN: 9781305507111
Author: Irvin B. Tucker
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 11SQ
To determine
The maximum profit earned at the price $10.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Explain "Greater production is not tantamount to greater profit"
Costs
MC
(per pound)
ATC
AVC
3.00
2.25
1.50
150 180 225
Quantity
(pounds)
The figure above shows the cost curves of a perfectly competitive company in the apple market. Use the graph in Figure to answer the following
questions. Assume the market price is $3 per pound.
a. What is the lowest price at which the apple producer will supply output in the short run? $
per pound.
b. What is the firm's profit-maximizing (loss-minimizing) output?
c. Is the firm earning a profit or a loss?
loss
profit
Price
MC
ATC
IC
MR
Quantity
a. What area(s) of the graph represent(s) total revenue for this firm if it was profit
maximizing?
b. What area(s) of the graph represent(s) total cost for this firm if it was profit
maximizing?
c. What area(s) of the graph represent(s) profits for this firm if it was profit maximizing?
d. What area(s) of the graph represent(s) deadweight loss if the firm was profit
maximizing?
Chapter 8 Solutions
Microeconomics For Today (MindTap Course List)
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
Knowledge Booster
Similar questions
- 10. The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of output is $3 and there are no fixed costs, what is the profit-maximizing level of output?arrow_forwardFor the pizza seller whose marginal, average variable, and average total cost curves are shown below. a. What is the profit maximizing level of output and profit of this firm if the price of pizza is $3.50? b. Below what price will this firm shut-down in the short-run? c. If the price was $4.50, what would this firm's profit be?arrow_forwardSuppose fixed costs are $10,000, variable costs are $40,000 and the price of the good is $10 and quantity of the good the firm sells is $10,000. A. Caluclate Total Costs. B. Caluclate Total Revenue. C. Calculate the Firm's Profits.arrow_forward
- The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost., now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of $25 each. a. What will be the company’s profits or losses? b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? c. At the given quantity and price, is the marginal unit produced adding to profits?arrow_forwardDraw the cost curves for a typical firm. For a given price, explain how the firm chooses the level of output that maximizes profit. At that level of output, show on your graph the total revenue of the firm. Show its total costs.arrow_forwardTomato Farms is selling tomatoes in a purely competitive market. Its output is 25,000 bushels, which sell for $30 a bushel. At this level of output, the marginal cost is $30 a bushel, average variable cost is $30.50 a bushel, and average total cost is $34.50 a bushel. (a) What is the firm’s total fixed cost? You must show your work.arrow_forward
- A profit-maximizing firm in a competitive market is currently producing 500 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?arrow_forwardUse the following information about a perfectly competitive (PC) firm to determine which quantity will maximize short-run profit if the product price = $6. Recall that an X indicates that no number should %3D be calculated for that space on the chart. Marginal Quantity Total Cost Cost 8. 12 17 3 4 30 38 23 1, 2.arrow_forwardBrody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.-Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer. -At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work. -Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200. -Brody's profit-maximizing quantity of saxophones -Brody's loss, completely shaded Quantity Total Variable cost 6 $120 7 $145 8 $165 9 $220 10 $290 11 $390arrow_forward
- Ssessm /assignm f'CollegeBoard AP Classroom Unit 3 Progress Check: FRQ 2. Quantity of Output Total Cost 0. $12 1. $14 $18 3. $24 4. $32 5. $42 $54 9. 7. $68 The table above shows the total cost function for a typical firm producing hats in a perfectly competitive market. The market price for hats is $9 per hat. (a) Calculate the average variable cost of the fifth unit. Show your work. (b) What is the firm's profit-maximizing quantity of hats? Explain using marginal analysis. (0) Draw a correctly labeled graph showing the firm's demand and marginal cost curves, and show the profit-maximizing quantity of nats determined in part (b). (d) If the rent of the building the firm occupies increases, what will happen to the firm's profit-maximizing quantity of autput in the short run? Explain. B IU Type here to search P国arrow_forwardSuppose a firm's marginal cost is increasing as it produces more output. Then the firms is said to be experiencing which of the following? a.increasing returns to scale b.diminishing returns to scale c.losses d.profitarrow_forwardBob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run? Question 4 options: Economic profits are $20 and accounting profits are minus $10 Economic profits are $40 and accounting profits are $0 Economic profits are minus $10 and accounting profits are $20 Economic profits are $0 and accounting profits are $40arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning