Check all that apply The firm is breaking even when it produces its profit maximizing outpu The marginal revenue for this firm is Pe Each additional product gets less expensive to produce If the market demand increases, Pe will increase This firm should shut down and produce something else
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- What does acceptable loss mean for a competitive firm? Explain and Draw a graphChapter 16 Homework PRICE (Thousands of dollars per fire engine) 220 Femi 200 180 160 140 120 100 80 60 40 20 0 0 True 1 False 2 4 56 7 QUANTITY (Fire engines) 3 8 Demand 9 10 increase production from 8 to 9 fire engines because the True or False: If alternatively Femi's HookNLadder were a competitive firm and $80,000 were the market price for an engine, decreasing its price from $80,000 to $40,000 would result in the same change in the production quantity and, thus, total revenue. Revenue Lost Revenue Gained dominates in this scenario.Suppose Musashi runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $25 per shirt. The following graph shows Musashi'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 Musashi produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 50 25 -25 1 2 3 7 QUANTITY (Shirts) TOTAL COST AND REVENUE (Dollars) co
- PRODUCTION| 2 8 10 12 14 LEVEL MARKET 3 3 3 3 PRICE ТОTAL INCOME TOTAL FIXED 14 14 14 14 14 14 14 COST ТОTAL 4.5 5.5 6.7 8.2 10 13.25 VARIABLE 25 COST TOTAL COST TОTAL BENEFIT MARGINAL 3 3 3 3 INCOME AVERAGE TOTAL COST Develop the following numerical example of perfect competition, which should add the procedure for calculating the missing costs, income, and profit. Considering the following data: a) Indicate at what level of production the MC is equal to the price, so that the company is perfectly competitive in the short term. 3. 3.Calculate Darnell'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. COSTS AND REVENUE (Dollars per shirt) 40 35 30 25 20 15 10 5 0 0 1 2 3 5 QUANTITY (Shirts) 4 6 7 8 O Marginal Revenue Marginal Cost ? Darnell'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 Darnell 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 than the price Darnell receives for each shirt he sells. Therefore, Darnell's profit- maximizing quantity corresponds to the intersection of the curves. Because Darnell is a price taker, this last condition can also be written asConsider 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
- The graph below shows the Total Revenue, Total Costs and the units of output produced by Firm A. Use the following graph to answer the questions that follow. First complete the row of MR.Quantity (Units) 0 1 2 3 4 5 6 7 8Total Revenue (TR) 0 90 180 270 360 450 540 630 720Marginal Revenue (MR) 0Total Cost (TC) 50 80 120 170 230 300 380 470 570Marginal Cost (MC) - 30 40 50 60 70 80 90 100a. What is the Marginal Revenue of the 5th unit of output?b. What is the Fixed Cost of this firm?c. What is the optimal production amount of this firm? (Hint: What is the condition that determinesproduction decisions in a perfectly competitive market?) Show your mathematical workMC 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)5Suppose Felix runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Felix's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Felix produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 0 1 ● ^ 2 O ☐ A ☐ A 3 4 5 QUANTITY (Frying pans) O ☐ 6 Total Cost ☐ 7 8 o Total Revenue Profit ? image 1 Calculate Felix's marginal revenue and marginal cost for the first seven frying pans 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.
- Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 QuantityO See Hint The graph below shows the marginal cost curve for two firms, A and B. Assuming these two firms together completely dominate their market, draw the market supply curve. Use the straight-line tool, and set the endpoints of the line based on the endpoints of the two given lines. To refer to the graphing tutorial for this question type, please click here. Price and marginal cost 160 150 140 130 120 110 100 80 70 60 50 40 30 20 10 160 る ろ 8さ88るるる Quantity supplied (thousands)do 1 2 1 4 5 6 7 A 9 TC MC TVC AVC ATC PRICE 12 14 5 7 10 14 19 t 32 Complete the above table and indicate the profit maximizing quantity of good to produce for the perfectly competitive firm HASRAHAST Below, graph the Demand, MR, ATC, AVC, and MC curves form the data given above. Be sure to indicate the profit maximizing quantity. Is the quantity the same as indicated above? 36 32 28 Perfect Competition Homework Problem 21 /2 8 TR Quity MR PROFIT GETTING STARTED 10 Getting to Know the Professor Q Search
