MyLab Economics with Pearson eText -- Access Card -- for Principles of Microeconomics
17th Edition
ISBN: 9780134081168
Author: CASE, Karl E.; Fair, Ray C.; Oster, Sharon E.
Publisher: PEARSON
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Question
Chapter 8, Problem 2.5P
(a)
To determine
To complete the table.
(b)
To determine
To graph the average variable cost curve, average total cost, and marginal cost curves.
(c)
To determine
The output and profit produced by the firm in the short run when price is $20.
(d)
To determine
The output and profit produced by the firm in the short run when price is $60.
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Students have asked these similar questions
The relationship between the firm's average variable, average total, and marginal cost curves above:
Marginal Reveue = Price = US $ 2.50 ;
a) Use the graph to find the Firm's profit-maximizing output.
b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business?
c) Will other firms with costs the same as Firms enter the market? Explain.
A firm sells 1,000 units per week. Suppose the average variable cost is $15, and the average cost is $55.
In the short run, the break-even price is:___?_____.
. In the long run, the break-even price is
.
Suppose the firm charges a price of $5 per unit.
Use the following table to indicate whether the firm will shut down or continue to produce in the short run and the long run.
Time
Continue to Produce
Shut Down
Short Run
?
?
Long Run
?
?
Bob'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 ?
A. Economic profits are minus $10 and accounting profits are $20
B.Economic profits are $20 and accounting profits are minus $10
C. None
Which one?
Chapter 8 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Principles of Microeconomics
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Similar questions
- USE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS). ANSWERS IN WHOLE NUMBER a. How many barrels of natural-organic oil reflect the lowest minimum average variable cost?b. How much is the price of the natural-organic oil per barrel?c. How much is the fixed cost to produce the natural-organic oil?d. How many barrels of natural-organic oil should the firm produce to maximize its profit?e. At what production level would the marginal cost exceed the average cost?arrow_forwardSuppose an increase in the cost of land increases the firm's fixed costs, as a result, average total cost increases from ATC2 to ATC1. What is profit maximizing quantity and price after the increase in average total costs? After the increase in average total costs does the firm make economic profit, economic loss or breaks even? How do you know? explain your answer.arrow_forwardBased on the given graph:a. If this firm profit-maximizes, how much output will it produce and what price will it charge? b. When this firm profit maximizes, what (compute) is the firm’s profit or loss? Is this firm in a short run or long run equilibrium? Why? c. Does the firm minimize cost? Why or why not? How much excess capacity does this firm have?arrow_forward
- Soft drink industry has been historically profitable why? compare the economies of the concentrate business to the economics of the bottling business. Why do you think the profitability is so different between these businesses?arrow_forwardExplain why a company would shut down in the short run.arrow_forwardFamily Mart like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this? It is clear that businesses operate in the short run, but do they ever operate in the long run? Discuss. What are the different type of costs incurred in the short run and in the long run?arrow_forward
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