Principles of Microeconomics, California Edition
2nd Edition
ISBN: 9780393622102
Author: Dirk Mateer, Lee Coppock
Publisher: NORTON
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Question
Chapter 9, Problem 2QR
To determine
Explain the two-step process used to identify the profit-maximizing level of output.
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Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?
Refer to the above diagram. This profit maximizing firm will:
A)
An economic profit of AJHB
B)
An economic loss of BHGC
C)
An economic profit of AJGC
D)
an economic profit of AJEO
Marginal revenue must exceed marginal cost.Explain why?
Chapter 9 Solutions
Principles of Microeconomics, California Edition
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Similar questions
- Describe and explain fully the type of economic profit that Is earned if price exceeds average cost. In Deep detail with at least 3 pages longarrow_forwardThinking on the Margin to Increase Profitability Have you ever walked into a restaurant for lunch and found it almost empty? Why, you might ask, does the restaurant even bother to stay open? It might seem that the revenue from so few customers could possible cover the cost of running the restaurant. Provide an opinion using the concepts of sunk costs, marginal cost and marginal revenue.arrow_forwardDistinguish clearly between Marginal Revenue and Marginal Costs using suitable examples.arrow_forward
- Describe the four steps taken to obtain a unit profit?arrow_forwardDelvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary. From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer. Calculate Delvin’s accounting profit per day. How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand?arrow_forwardDraw and describe a diagram representing the cost curves – MC, AC, and AVC – for a profit-maximizing firm under perfect competition. Show U-shaped AC and AVC curves. Label the breakeven and shut down prices. Also, show a price between the breakeven and shut down prices and explain how the firm decides on its profit-maximizing/loss-minimizing output level at that price and show how the amount of profit or loss can be shown in the diagram. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Jasmine decides to make and sell jelly cups. It costs jasmine Rs.1000 to set up and Rs.50 per cup made. She decides to sell each cup for 150. By using this information, answer the following questions: A) Write and equation for jasmine's revenue, cost and profit functions? B) Graph each function on a set of axes? C) Find the breakeven point from these graphs? ( D) How many jelly cups will jasmine need to sell in order to make a profit? (E) If jasmine wishes to make a profit of 50, how many jelly cups does she need to sell?arrow_forwardUse the table in the image below to answer this question Use the information to plot the demand, marginal revenue and marginal cost curves.arrow_forwardPlease provide a clear presentation for the following, type only the answers here: 1.Plot total cost and total revenue in one graph 2.Plot Average revenue ,marginal revenue, average cost and marginal cost in one graph.arrow_forward
- If Hasan runs the restaurant himself and before setting up this business, he was working in a company as a salesman for $15,000 per year. Hasan owns the building that his restaurant in housed in and could have rented it out for $10,000 per year. Those would be an implicit cost of opening his own restaurant. Calculate the economic profit?arrow_forwardDescribe a firm’s shutdown decision.arrow_forwardc) what is the profit or loss at the profit maximizing output?arrow_forward
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