1. When the business produce products at break-even point, it is said to be A. A loss for the business B. A profit for the business C. Neither a profit nor loss for the business D. None of the above 2. Which of the following shows break-even point? A. TC = Revenue B. TC > Revenue C. TC < Revenue
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- Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.1. This graph shows a company's marginal cost and marginal revenue functions. Marginal Cost and Marginal Revenue MR, MC, $/item 100 50 50 100 150 q, items | 200 -50 A. Label the graph, showing which curve is marginal revenue and which is marginal cost. B. What value of q will maximize revenue? c. What value of q will maximize profit? D. This company is currently producing 150 items. If they produce 2 additional items, estimate how the company's profit will change. Give a complete sentence expressing your answer. E. Suppose that we know that this company's fixed costs are S2000. Sketch a graph of Revenue and Cost functions that is consistent with the graphs above of MR and MC.JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
- 2. Do the following 4 businesses have a positive profit? Should they shut down or not? Circle the correct answer. a. TR = $300 TC= $600 TFC=$350 TVC= $250 %3D %D 0000 Positive Profit or Loss Shutdown or Keep Operating b. P=$4.50 ATC=$4.00 AVC=$3.50 %3D Positive Profit or Loss Shutdown or Keep Operating c. TR = $800 TC= $600 TFC= $200 TVC= $400 %3| %3D Positive Profit or Loss Shutdown or Keep Operating d. P $7.00 ATC= $9.00 AVC= $8.00 %| Positive Profit or Loss Shutdown or Keep Operating2. Tom quit his $65,000 a year corporate lawyer job to open up his own law practice. In Tom's first year in business his total revenue equaled $150,000. Tom's explicit cost during the year totaled S85,000. What is Tom's economic profit for his first year in business? A SO b. $20,000 e. S65,000 d. $85.000The figure to the right shows Firm X, a firm that is maximizing profit. The firm is making an economic produces Price and cost (dollars) because it 35 units and charges per unit. MC ATC 30 28 A. profit; 100; $30 25 B. loss; 100; $20 C. loss; 120; $28 20 D. loss; 110; $20 15 O E. profit; 100; $10 10 MR: 100 110 120 130 06 Quantity (units)
- based on the information in the table what is marla's profit margin? marla's smoothie shop total revenue-$1,400total cost- $900average cost- $7fixed cost-$700quantity-200 A.$3.50 B.$2.50 C.$4.50 D.$5.00. A firm should continue to increase an activity so long as the total revenue from the activity exceeds the total cost of the activity. a. True O b. False12. Bob's Barbershop manager has calculated the marginal revenue is Ksh 200 and marginal cost is $250. What should she do to maximize profit? A. expand output. B. do nothing without information about your fixed costs. C. reduce output until marginal revenue equals marginal cost. D. expand output until marginal revenue equals zero. E. reduce output beyond the level where marginal revenue equals zero. 13. People's average incomes fall from £1,000 a week to £600 a week. As a result, demand for potatoes increases from 1 million tonnes to 1.2 million tonnes a week. The income elasticity of demand for potatoes is A. -0.25 В. 0.6 С. -0.5 D. -2 14. If the price of a good with a price elasticity of supply of 2.5 increases by 10%, the quantity supplied will: A. Fall by 25% B. R ise by 25% C. Fall by 40% D. Rise by 0.4% 15. A firm facing a perfectly price elastic demand curve, ceteris paribus A. can sell all it produces only by lowering its price below the market price. B. can raise its price and…
- 11. Explain the condition of equilibrium of a firm based on marginal cost and marginalrevenue. Need details explanation and make sure that no plagiarised answer1. Fill in this chart and explain why the firm earnsa profit no matter how many units they produce or the price they choose. 2. Using this data, how many units should this firm produce and what price should they chargeassuming they want to profit maximize.8. Firm's Revenue A firm in a competitive market receives $1,080 in total revenue and has marginal revenue of $20. The firm's average revenue is S units were sold.