Output and Cost Information Output Total Fixed Cost Total Variable Cost 1 $20 $30 2 $20 $70 3 $20 $100 4 $20 $120 5 $20 $180 6 $20 $268 The table above provides information for a firm in a purely competitive industry. The table above provides information for a firm in a purely competitive industry. Every firm in this industry has the same cost structure as above. From what you know about these firms’ cost structures, the highest possible price per unit that could exist as the market price in long-run equilibrium in this industry is $____________.

Output and Cost Information Output Total Fixed Cost Total Variable Cost 1 $20 $30 2 $20 $70 3 $20 $100 4 $20 $120 5 $20 $180 6 $20 $268 The table above provides information for a firm in a purely competitive industry. The table above provides information for a firm in a purely competitive industry. Every firm in this industry has the same cost structure as above. From what you know about these firms’ cost structures, the highest possible price per unit that could exist as the market price in long-run equilibrium in this industry is $____________.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 2MC

See similar textbooks

Similar questions

Refer to the table below. Quantity Cost (in dollars) Fixed Costs (in dollars) Total Costs (in dollars) Average Total Costs (in dollars per unit) Average Variable Costs (in dollars per unit) Marginal Costs (in dollars per unit) 0 0 40 40 - - - - - - 1 15 40 55 55 15 15 2 35 40 75 37.5 17.5 20 3 60 40 100 33.3 20 25 4 90 40 130 32.5 22.5 30 5 125 40 165 33 25 35 6 160 40 200 33.3 26.6 40 If this information were used to create a total cost graph, the curve should Question 6 options: begin at 40 on the vertical axis and slope upward. become steeper as quantity increases. become steeper due to diminishing returns. reflect all of the above.
d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3). Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. (1) Price $26 32 38 41 46 56 66 ▶ (2) Quantity Supplied, Single Firm (3) Profit (+) or Loss (-) (4) Quantity Supplied, 1,500 Firms
The table gives some of the costs of the Delicious Pie Company. The marginal cost per pie of increasing the output of pies from 100 to 200 is Total variable cost (dollars) Output (pies) 0 100 200 300 400 $8.00 $600 $6.00 $5.00 0 400 1,000 1,800 2,800 Total cost (dollars) 300 700 1300 2100 3100 ?
Total variable Quantity (dozens of sea shells per day) cost (dollars) 200 60.00 201 61.00 202 62.50 203 64.00 204 66.00 205 68.50 206 72.00 Sue's Sea Shells by the Sea Shore is a perfectly competitive firm selling sea shells at the market price of $2 per dozen. Sue's Sea Shells by the Sea Shore has fixed costs of $40 per day and a variable cost schedule in the table above. Based on this information, we can expect the number of firms in the sea shell market to a. increase. O b. remain constant. O c. decrease. O d. It is impossible to say.
An industry currently has 100 firms, each of which has fixed costs of $8 and average variable costs as follows: Complete the following table by deriving the total cost, marginal cost, and average total cost for each quantity from 1 to 6. Average Variable Cost (Dollars) Total Cost Marginal Cost (Dollars) Average Total Cost (Dollars) Quantity (Dollars) 11 The equilibrium price is currently $15. Each firm produces units, so the total quantity supplied in the market is units. In the long run, firms can enter and exit the market, and all entrants have the same costs as in the previous table. As this market makes the transition to its long-run equilibrium, the price will quantity demanded will and the quantity supplied by each firm will Use the orange line (square point) to graph the long-run supply curve for this market. 20 19 18 17 Long-Run Supply 16 15 14
The following are the cost information of a typical ice tea company in an industry with 100 firms. Output (ice tea per hour) Marginal Cost ($ per ice tea) Average Variable Cost ($ per ice tea) Average Total Cost ($ per ice tea) 3 2.50 4.00 7.33 4 2.20 3.53 6.03 5 1.90 3.24 5.24 6 2.00 3.00 4.67 7 2.91 2.91 4.34 8 4.25 3.00 4.25 9 8.00 3.33 4.44 a) At the price of $2.20 per ice tea, what is the firm’s profit maximizing level of output? Why is this the profit maximizing level of output for the firm? b) If the market price is $8 per ice tea and the firm is producing six (6) ice tea per hour, is the firm maximizing profit or not? Why or why not? If the firm is not maximizing profit, what should it do to maximize profit? c) At the price of $8 per ice tea, what is the firm’s profit-maximizing level of output? Why is this the profit maximizing level of output? What is the firm’s economic profit at…
The following are the cost information of a typical ice tea company in an industry with 100 firms. Output (ice tea per hour) Marginal Cost ($ per ice tea) Average Variable Cost ($ per ice tea) Average Total Cost ($ per ice tea) 3 2.50 4.00 7.33 4 2.20 3.53 6.03 5 1.90 3.24 5.24 6 2.00 3.00 4.67 7 2.91 2.91 4.34 8 4.25 3.00 4.25 9 8.00 3.33 4.44 d) Is the price $8 a short-run or long-run equilibrium price for the industry? If the price is not a long run equilibrium price, what adjustments are likely to happen in the market for it to reach long run equilibrium. e) What price must prevail in the market for a typical firm to operate in the short run? At this price, how many ice tea will be supplied by all firms in the market?
Tim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?
An industry currently has 100 firms, each of which has fixed costs of $16 and average variable costs as follows: Complete the following table by deriving the total cost, marginal cost, and average total cost for each quantity from 1 to 6. Average Variable Cost Total Cost Marginal Cost Average Total Cost Quantity (Dollars) (Dollars) (Dollars) (Dollars) 16 1 2 4. 6 The equilibrium price is currently $10. units. Each firm produces units, so the total quantity supplied in the market is >> Desktop 54°F earch AAAAAA 1 2 3 4
Assume that the cost data in the following table are for a purely competitive producer: Total Product Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 0 1 $ 60 $ 45 $ 105 $ 45 2 30 42.5 72.5 40 3 20 40 60 35 4 15 37.5 52.5 30 5 12 37 49 35 6 10 37.5 47.5 40 7 8.57 38.57 47.14 45 8 7.5 40.63 48.13 55 9 6.67 43.33 50 65 10 6 46.5 52.5 75
Question 8 of 20 Total Total Average Average Average Fixed Variable Total Marginal Variable Fixed Cost $200 Output Total (Q) Cost Cost Cost Cost Cost Cost $0 $200 $200 $150 $350 40 $200 $250 $450 60 $200 $450 $650 80 $200 $800 $1,000 For the cost data shown above, what is this firm's Marginal Cost (MC) if it increases its Output (Q) from 20 to 40? $100 $10.00 $7.50 O $5.00 20
Our firm produces two products: generators and solar panels. Name five economies of scale you would expect our company to leverage and explain how you would expect the company to leverage them. Our firm’s accountants have put together the following table of costs. Generators Solar Panels Fixed Costs $2 million $2 million Variable Costs $2 million $2 million Revenue $3 million $5 million The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales. Explain all your answers. If you cannot explain why you are taking an action, then you are just guessing.