The table shows some of the costs of production for Marie's Fortune Cookies. The fortune cookie market is a perfectly competitive market.At a market price of $62.99 a batch, what quantity does Marie's produce and what is the firm's economic profit in the short run?Do firms enter or exit the market?At a market price of $62.99 a batch, Marie's producesbatches of fortune cookies.In the short run, Marie's maximizes its profit andIn the long run, firmsO A. enterO B. neither enter nor exitO C. exitthe fortune cookie market.of $ a day.Totalproduct(batchesper day)12345678Average Average Averagefixed variable totalcostcostcost(dollars per batch)44.00 132.0088.0044.0029.3322.0017.6014.6712.5711.0037.0032.0029.0028.2029.0032.0037.5081.0061.3351.0045.8043.6744.5748.50*************Marginalcost30.0021.9920.0125.0033.0249.9776.01

A perfectly competitive firm sets its profit-maximizing level of output at a point where the price…

table shows some of the costs of production for Marie's Fortune Cookies. The fortune cookie market is a perfectly competitive market. market price of $62.99 a batch, what quantity does Marie's produce and what is the firm's economic profit in the short run? rms enter or exit the market? market price of $62.99 a batch, Marie's produces patches of fortune cookies. e short run, Marie's maximizes its profit and long run, firms the fortune cookie market. A. enter 3. neither enter nor exit C. exit of S a day. Total product (batches per day) 1 2 3 4 5 6 7 8 Average Average Average fixed variable total cost cost cost (dollars per batch) 44.00 132.00 88.00 44.00 37.00 81.00 29.33 32.00 61.33 22.00 17.60 14.67 29.00 12.57 29.00 11.00 28.20 45.80 32.00 51.00 37.50 43.67 44.57 48.50 wwww Marginal cost **** 30.00 21.99 20.01 25.00 ....33.02 49.97 76.01

table shows some of the costs of production for Marie's Fortune Cookies. The fortune cookie market is a perfectly competitive market. market price of $62.99 a batch, what quantity does Marie's produce and what is the firm's economic profit in the short run? rms enter or exit the market? market price of $62.99 a batch, Marie's produces patches of fortune cookies. e short run, Marie's maximizes its profit and long run, firms the fortune cookie market. A. enter 3. neither enter nor exit C. exit of S a day. Total product (batches per day) 1 2 3 4 5 6 7 8 Average Average Average fixed variable total cost cost cost (dollars per batch) 44.00 132.00 88.00 44.00 37.00 81.00 29.33 32.00 61.33 22.00 17.60 14.67 29.00 12.57 29.00 11.00 28.20 45.80 32.00 51.00 37.50 43.67 44.57 48.50 wwww Marginal cost **** 30.00 21.99 20.01 25.00 ....33.02 49.97 76.01

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The following graph shows a firm’s marginal cost and average cost of production of raspberries. a. The equilibrium price at this market is $2.5. At this price, is the firm earning economic profit or is itincurring economic losses?b. Is the firm operating in a competitive market based on the given information? Why?c. Suppose the price of raspberries increases to $5. How would you answer a. and b. in this case?d. If the market is indeed competitive, what will happen after the price increase in c.? What will bethe final price and the long-term profit of the firm?
The following graph summarizes the demand and costs for a firm that operates in a perfectly competitive market. a. What level of output should this firm produce in the short run? b. What price should this firm charge in the short run? c. What is the firm’s total cost at this level of output? d. What is the firm’s total variable cost at this level of output? e. What is the firm’s fixed cost at this level of output? f. What is the firm’s profit if it produces this level of output? g. What is the firm’s profit if it shuts down? h. In the long run, should this firm continue to operate or shut DOWN
Farmer Smith grows wheat. The average total cost and marginal cost of growing wheat for an individual farmer are illustrated in the graph to the right. 10- MC 9- ATC Suppose the market for wheat is perfectly competitive. If the market price is $8 per bushel, then to maximize profits, farmer Smith should produce thousand 8- Price bushels of wheat. (Enter a numeric response using an integer.) 4- 3- 2- 10 20 30 40 Quantity of wheat (bushels per month in 1000s) 50 60 70 80 90 100 Price and cost (dollars per bushel)
Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 90 Profit or Loss 80 70 60 40 ATC 30 20 MC AVC 10 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of sweaters per day) In the short run, at a market price of $45 per sweater, this firm will choose to produce 45,000 sweaters per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $45 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be thousand per day in the short run. PRICE (Dollars per sweater)
Suppose the market for apples is perfectly competitive. The first graph depicts the supply and demand curves for the market for apples. The second graph represents an individual apple grower. Graph the demand curve the individual grower faces by placing the endpoints of the firm demand curve in the correct locations. Market for apples Individual apple grower Price of apples ($/bushel) 10 $10 9 9 8 8 S 7 7 6. 6. 5 4 3 D 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Bushels of apples (thousands) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Bushels of apples (hundreds) Firm demand curve Price of apples ($/bushel)
ion 5 of 20 The accompanying graph depicts the Marginal Cost (MC), Average Cost (AC), Marginal Revenue (MR), and Demand (D) curves for a competitive firm. 20 MC a. Move point E to the profit maximiznig price and quantity on the graph. 18 AC 16 b. What price should this firm charge to maximize profit? 14 12 D= MR 10 Profit-maximizing price: $ 6 4 c. How many units should this firm produce to maximize 2 profit? 2 4 6 8 10 12 14 16 18 20 Quantity Profit-maximizing output: units Price, MR, MC ($)
Suppose Becky runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Becky's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Becky produces, including zero shirts. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 -25 2. 3 4 6. 8. QUANTITY (Shirts) 50 25 TOTAL COST AND REVENUE (Dollars)
Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Larry's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Larry produces. Calculate Larry's marginal revenue and marginal cost for the first seven shirts he produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is…
Write True or False and explain briefly 1- Consider a firm in a perfectly competitive market.There are situations where it is optimal for the firm to continue operating in the short-run , but shut down in the long-run. 2- Consider a firm in a perfectly competitive market.There are situations where it is optimal for the firm to shut-down in the short-run , but continue to operate in the long-run.
Suppose XYZ sells widgets in a competitive market. Suppose that, when the quantity of production is 10 units, XYZ's: • marginal profit is $3 • average variable cost is $9 • average total cost is $11 • average fixed cost is $2 • average revenue is $15 What is XYZ's marginal cost when the quantity of production is 10 units? tities
Suppose the market for beans is perfectly competitive. The average total cost and marginal cost of growing beans in the long run for an individual farmer are illustrated in the graph to the right. According to the graph, the long run equilibrium price for beans is $ per box. (Enter a numeric response using a real number rounded to two decimal places.) C Price and cost (dollars per box) 10- 9- 00 N 1 0 10 MC 20 30 40 50 60 70 80 Quantity of beans (boxes per week) ATC 90 100 N
Suppose Eileen runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Eileen's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Eileen produces. 200 175 Total Revenue 150 125 Total Cost Profit 100 50 25 -25 1 3 4 6 7 QUANTITY (Shirts) Calculate Eileen's marginal revenue and marginal cost for the first seven shirts she produces, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 40 Marginal Revenue Marginal Cost 1. 5 6 7 8 QUANTITY (Shirts) Eileen's profit is maximized when she produces shirts. When she does this, the marginal cost of the last shirt she produces is $ which is v than the price Eileen receives…