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- A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.13. At what price the competitive firm is making a zero profit? Price and cost P₂₁ P₁ Po 0 ph A) Po B) P₁ - C) P₂ D) P3 MC ATC 25emoont noleamo al bris 18ey 8 000 Low Vibles baxil eir) do Q Q, Q₂ Qz AVC Quantity с Fitong pimonste 00012 al hog olnionobe bris 00088 al mong ginasA 00012 al ho Jonq bolinusapi 00052 al fong orase bhe 0009 eng poitructa 00082 ei silang onoos bis 00013 al q prinudso 14. In the diagram of question 13, if the market price is P₁, what will be the total revenue? A) OP₁bQ₁ B).horize B) OP₁fQ3 C) OP1eQ2 D) P₁P2de aboubong slimtia lioa anil 16 droun elbubong nalimie lise emit elbubong 1stnia ne arinit v touborq ernaa erilyoxa lies aermit to admin apie 15. In the diagram of question 13, if the market price is P₁, what will be the total cost? A) OP₁bQ₁ yonepifle evideolls allu14mco allellegon B) P₁P3cb C) P₁P2de D) OP3CQ₁ etaal vier ristem faed farll aloubog nailiaqnco dilatiogonom telinu muaConsider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 60
- An industry currently has 100 firms, each of whichhas fixed cost of $16 and average variable cost asfollows:Quantity Average Variable Cost1 $12 23 34 45 56 6a. Compute a firm’s marginal cost and average totalcost for each quantity from 1 to 6.b. The equilibrium price is currently $10. How muchdoes each firm produce? What is the total quantitysupplied in the market?c. In the long run, firms can enter and exit themarket, and all entrants have the same costs asabove. As this market makes the transition to itslong-run equilibrium, will the price rise or fall?Will the quantity demanded rise or fall? Will thequantity supplied by each firm rise or fall? Explainyour answers.d. Graph the long-run supply curve for this market,with specific numbers on the axes as relevant.A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the market quantity as the market leavesand then returns to long-run equilibriumA market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
- essay (on this firm) argues that, the firm would be better off by closing down. Do you a unit of output of this company is Birr L3. A student working on his senior A company in a perfectly competitive market has a total cost function given as: 6. TC 50+40+ The price agree? Explain By using the knowledge of relationshins among the various cost concepts, fill the bia cells of the following table. Quantity TFC TVC TC MC AFC AVC ATC 50 50 64 98 162 26 20 finms (Fi and Fa) producing identical product competing for like to dominate the other, if possible. They each defendsQ23 Suppose a perfectly competitive firm is currently operating with the following information: Output = 1500 tonnesAverage total cost = $627 per tonneAverage variable cost = $614 per tonneMarginal revenue = $620 per tonneMarginal cost = $620 per tonneAt the current level of output, this firm is _____ profit and is an earning economic profit of _____. a. Maximising; -$10500. b. Not maximising; -$10500. c. Maximising; $10500. d. Maximising; $9000. e. Not maximising; -$9000.Given the graph below, the firm's supply curve is represented by that portion of its Dollars PBE PSD 70 60 50 40 30 20 10 0 1 B Average total cost 4.8 Profit Maximization Average variable cost 6.5 Output E 8.1 SD 9.6 G 10.8 Marginal cost Marginal revenue BE OMAX H 11.6 that lays
- esti a firm operating in a purely competitive market MC 40 36 32 28 24 ATC 20 16 AVC 12 8 Q 8 12 16 20 24 28 32 26. What would be the short-run equilibrium quantity produced by this firm if the market price were $32? 9. Cligk Saug and Submit to caue and suhmit Click Save All Answers to save all answers. %24 4.MC we e-MR-D 01214 6 telof wh Piease refer to the above graph of a perfectly competitive firm's cost and revenue curves the price of thin product is $7, what is the proft maximizing level of output? unts the price of this product is $7, what is the frm's total revenue when it maximires proft? S It the price of this product is $7, what is the fiem's total cost when it maximizes profir?S It the price of this product is $7, what is the fims total variable cost when it maximizes proft?S What is the fiem's tatal fed oost? the price of this product is $7, what is the fm's proft or loss when t maximizes pro? of loss, write answer as a regative number wth minius sgn)5E E on The diagram illustrates the demand curve, isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Assume that MQ Motors currently chooses to operate at Point E. Which statement correctly describes the market of MQ2020? 10,000 Price, marginal cost (5) Pt-$5,440 Po B 0 190 20 Q=32 D Qo Quantity of cars, Q Marginal cost Isoprofit curve $150,000 Isoprofit curve 563,360 Demand curve 120 Select one: O a. Total surplus is not being maximised. Ob. Deadweight loss is the loss incurred by MQ Motors for not selling more cars. O All possible gains from trade are being achieved as MQ Motors operates at its profit-maximising output and price. Od. The amount of consumer surplus is the area ADP. O e. Pareto efficient allocation is currently being achieved.
