Jamie Co. has a patented disinfectant to clean the kitchen of restaurants. The market demand for her patented disinfectant is Q = 1,000 – 0.2P. Jamie Co. has a total cost function of C = 100,000 + 2,000Q + 10Q2. What is the profit-maximizing price and output level of Jamie Co.? Show your workings.
Q: uppose Bedox is a patent drug for man’s beauty. Her manufacturer faces a market demand for Bedox of…
A: The profit is maximized where the Marginal Revenue is equal to the Marginal cost. or MR = MC.
Q: The figure below shows the demand (D, MR) and cost (MC, ATC) curves for the Hand Made Shirt Shop…
A: The fixed cost does not change with change in the level of output. The firm has to bear the fixed…
Q: Q4. For a firm in Perfect competition, the profit maximization output rule is either MR-MC
A: A profit-maximizing firm produces at the intersection point of MR and MC. i.e., MR = MC is the…
Q: The fastfood industry can be considered a perfectly competitive industry between two competitive…
A:
Q: The demand function can be expressed algebraically as: P = 200 – 0.ĄQ when 0 50 Calculate the…
A: We’ve been given inverse demand functions and the total cost function for Chillman. With the use of…
Q: The car manufacturing market consists of 100 identical factories, each with a marginal cost curve…
A: We will answer only the first subpart of the question. Please repost the question with the remaining…
Q: The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the…
A: Different market structures are categorized on the basis of the number of buyers and sellers, the…
Q: Since you must reduce the price to increase sales, the marginal revenue curve of an imperfectly…
A: An imperfectly competitive firm has to lower its prices inorder to sell more units of output. So,…
Q: Prove that the marginal revenue curve has twice the slope and the same intercept as a linear demand…
A: Marginal revenue curve has twice the slope and the same intercept as a linear demand curve.
Q: Under perfect competition, individual firms have no control over price. Therefore, the firm’s…
A: Perfect competition is a market structure in which many sellers and buyers are existing in the…
Q: Consider a number of firms facing identical total cost function of the form: TC = Q3 -6Q2+10Q. The…
A: The money spent to purchase the factor of production to produce the goods and services is termed as…
Q: A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost…
A: Profit maximization is the short run or long run process by which a firm may determine the price,…
Q: Suppose that there are 40 firms in a market, each with the following cost function: C(q) = 44 + 3q².…
A: Given: C(q)=44+3Q^2 D(p)=1260-25p
Q: A competitive firm has a total cost function: TC = 100 + 25q − 8q2 + 2q3 and a marginal cost…
A: TVC = TC-TFC where TFC = 100. So TVC = 25q -8q2 + 2q3
Q: economic profits.
A: 1. please find the graph below with labels showing The profit-maximizing output and price, labeled…
Q: Because advertisement services are differentiated, Facebook sets the price equal to marginal…
A: 1) here, option D is correct that is Facebook sets the price equals to marginal cost. Because in…
Q: Derive the profit function 7(p) and supply function (or correspondence) y(p) for the single-output…
A: GIVEN Derive the profit function ∏(p) and supply function (or correspondence) y(p) for the…
Q: The fastfood industry can be considered a perfectly competitive industry between two competitive…
A: A monopoly is a sole producer of a good in the market thus acting as a price maker whereas in a…
Q: A market contains many identical firms, each with the short run total cost function STC(Q) = 400 +…
A: When each firm in the industry is earning zero profit, then it means that it is charging a price…
Q: All of the following are ways by which existing firms can deter the entry of new firms into an…
A: The answer to above is (A) threating to raise prices. When a new firm enters the industry , it faces…
Q: minimizes the firm’s AVC.
A: Average variable cost (AVC) = Variable cost (VC)/output (Q)
Q: Alchem (L) is the price leader in the polyglue market. All 10 other manufacturers (follower [F]…
A:
Q: pose a farmer is a price taker for soybean sales with cost functions given by the following:…
A: The farmer operates in a perfectly competitive market since he is a price taker implying that the…
Q: Given the cost data in the table below, if the market price is $138, then the firm's profit…
A: Profit maximization is the ultimate goal of every firm operating in the market.
Q: The graph below shows the costs structure of a firm operating under pure or perfect competition in…
A: Cost is incurred when firm produces some units of output. There are some types of cost. Fixed cost…
Q: (Question 3 of 4): Consider that a perfectly competitive constant long-run cost industry with…
A: Given Q = 2020 - 2P Total Cost(TC) = 0.5q2 + 10q + 50 Average Total Cost (ATC) = Total Cost(TC) /…
Q: PakPerfect Inc. estimates equation of its total costs of production as TC = 500 + 10Q + 5Q2 and…
A:
Q: Big Boss is a local pet shop, mainly selling cat food. It has a constant marginal cost of $24. She…
A: The level with which the quantity demanded of a good changes with a change in its price is referred…
Q: Suppose the inverse demand function is P-12-Q, and cost is given by C(Q)+40 If marginal revenue is…
A: Answer; Given : MC= 4 and MR= 12-2Q
Q: Suppose the total cost of a representative perfectly competitive apple producer is given as TC = 12…
A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first three…
Q: 6. What is the output that maximize revenue for uie firm given the following demand function Q = 15…
A: The cost function is simply the initial cost plus the manufacturing cost Here we calculate the…
Q: A bicycle manufacture faces a horizontal demand curve . the firm's total cost are given by the…
A: Marginal cost is the change in the total cost with the change of increment in quantity produced by…
Q: Joyce owns a gas station and monopolizes gas sales along a remote stretch of road. In February,…
A: We are authorized to answer one question at a time since you have not mentioned which question you…
Q: The AC and MC values for firms in a perfectly competitive industry are as follows: Q AC MC 1 12 2 8…
A: In perfect competition, the firm produces at where price (or MR) equal to the marginal cost. It is…
Q: The demand curve of a firm is p=1200–21q and its total cost is (q) = 2q³ – 66q² +600q+1000 where q…
A: An administrator boosts benefit when the worth of the last unit of item (minor income) rises to the…
Q: If each of 100 firms in a competitive industry has the following Marginal Cost function (i.e., firm…
A: In the perfect competitive market, a firm 's supply curve is given by its marginal cost curve. This…
Q: Suppose the total cost of a representative perfectly competitive apple producer is given as TC = 12…
A: We are going to use the relationship between supply function and short run marginal cost and Price =…
Q: Given the level of demand below, what is the marginal revenue of the fifth unit of production?…
A: The MR i.e. Marginal Revenue is the revenue from one extra unit sold.
Q: Which of the following is NOT an expected outcome for a firm in a market where sellers have market…
A: Economic profit=(P-ATC) *Q
Q: Consider a competitive constant-cost industry in which each firm's marginal and average costs are…
A:
Q: Fruit market (a perfectly competitive market), the industry demand and supply of tomato (a…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output…
A: Price = 3 Average variable cost = variable cost/ output = 600/100 = 6 Since the price is below the…
Q: Given the cost data in the table below, the firm will shut down and produce zero output if the…
A: The firm incurs loss if total revenue earned is less than total cost. It implies that firm is not…
Q: Consider the following diagram showing the cost and revenue conditions of a firm. Price (RM) MC
A: The equilibrium is reached where the P =MC. The firm will shutdown its facility if it is not able to…
Q: In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that…
A: Pure competition is the market form in which there are large numbers of buyers and sellers that…
Q: demand curve, marginal revenue curve and total cost curve for a product are as shown respectively…
A: The total cost refers to the monetary value of all the inputs used by the firm in the production of…
Q: Banana Brothers, manufactures two types of Y Blocks: The Alfa and the Beta. Denoting Alfa output as…
A: Banana Brothers when deciding the equilibrium quantity of alpha and beta to produce . They…
Jamie Co. has a patented disinfectant to clean the kitchen of restaurants. The market
cost function of C = 100,000 + 2,000Q + 10Q2.
What is the profit-maximizing
workings.
Step by step
Solved in 3 steps with 6 images
- Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases O B. average total cost does not change at the quantity produced OC. average total cost increases at the quantity produced O D. average total cost decreases at the quantity producedEOC 17.07 Imagine the potato chip market is made up of two businesses: Jay's potato chips and Leah's stackable potato chips. Each company has just come up with an idea for a new flavour of chip, which it would sell for $3 a bag. Assume that the marginal cost for each new bag of chips is a constant $1 and the only fixed cost is advertising. Each company knows that if it spends $5 million on advertising, it will get 2 million consumers to try its new product. Jay's potato chips' market research suggests that its new flavour does not have any staying power in the market. Even though it could get 2 million consumers to buy the product once, it is unlikely that they will continue to buy the product in the future. Leah's stackable potato chips' research suggests that its product is very good, and consumers who try the product will continue to be buyers over the ensuing year. On the basis of its market research, Leah's stackable potato chips estimates that its initial 2 million customers will…Curt grows beautiful orchids. His total fixed cost is $22 a day, and his average variable cost is $2 a plant. Few people know about Curt's Orchids and he is maximizing his profit by selling 11 orchids a day for $4 a plant. Curt thinks that if he spends $10 a day on advertising, he can increase his market and sell 29 orchids a day for $4 a plant. If Curt advertises will his average total cost increase or decrease at the quantity produced? If Curt advertises and as a result he sells 29 orchids a day for $4 a plant, his O A. average total cost decreases at the quantity produced B. average total cost decreases if total cost decreases, and increases if total cost increases C. average total cost increases at the quantity produced D. average total cost does not change at the quantity produced
- Suppose that Tommy Hilfiger's marginal cost of a jacket is a constant $100 and at one of the firm's shops, total fixed cost is $2,000 a day. The profit-maximizing number of jackets sold in this shop is 20 a day. When the shops nearby start to advertise their jackets, this Tommy Hilfiger shop spends $2,000 a day advertising its jackets, and its profit-maximizing number of jackets sold jumps to 50 a day. What happens to Tommy's markup and its economic profit? Why? Tommy's markup A. rises, falls, or remains unchanged depending on the effect of advertising on demand OB. falls because advertising decreases demand OC. rises because advertising increases demand OD. does not change because advertising is generally ineffective Search In the short run, Tommy's economic profit ** A. is unknown, zero OB. decreases with advertising, zero OC. increases with advertising, positive OD. is unknown, positive In the long-run, Tommy's economic profit is NextSuppose that Roots' marginal cost of a jacket is a constant $75.00 and the total fixed cost at one of its stores is $2,000 a day. This store sells 25 jackets a day, which is its profit-maximizing number of jackets. Then the stores nearby start to advertise their jackets. The Roots store now spends $1,000 a day advertising its jackets, and its profit-maximizing number of jackets sold jumps to 75 a day. What is this store's average total cost of a jacket sold before the advertising begins and after the advertising begins. >>> Answer to 2 decimal places. Can you say what happens to the price of a Roots jacket, Roots' markup, and Roots' economic profit? Before the advertising begins, the average total cost of a jacket sold in this store is $ After the advertising begins, the average total cost of a jacket sold in this store is $ If the nearby firms' advertising decreases the demand for Roots' jackets and makes the demand more elastic, the price of a Roots' jacket If Roots' advertising…Suppose that Spacely Sprockets' marginal cost of a jacket is a constant $150 and the total fixed cost at one of its stores is $3,000 a day. This particular store seils 40 jackets a day, which is its profit-maximizing number of jackets. The nearby stores begin to advertise their jackets. The Spacely Sprockets store now spends $1,500 a day advertising its jackets, and its profit-maximizing number of jackets sold jumps to 50 a day. What happens to the price of a Spacely Sprockets' jacket, Spacely Sprockets' markup, and Spacely Sprockets' economic profit?
- Nathan runs a rare book store. Last year, he earned $35,000 in revenue and had explicit costs of $8,000. Nathan could have made $35,000 driving a boat in a water ski show and received an additional $5,000 if he had used the company's inputs in a different way. Calculate Nathan's economic profit. $Find TC, MC, AFC, AVC, and ATC from the following table.Instructions: Enter your responses rounded to two decimal places. Units (Q) FC($) VC($) TC($) MC($) AFC($) AVC($) ATC($) 0 100 0 — — — — 1 100 40 2 100 60 3 100 70 4 100 85 5 100 130 (Note: Marginal costs should be interpreted as between levels of output.)The makers of Panax pain reliever do a lot of advertising and have very loyal customers. In contrast, the makers of generic paracetamol do no advertising, and their customers shop only for the lowest price. Assume that the marginal costs of Panax and generic paracetamol are the same and constant. Draw a diagram showing Panax’s demand, marginal revenue and marginal cost curves. Label Panax’s price and mark-up over marginal cost. Repeat part 1 for a producer of generic paracetamol. How do the diagrams differ? Which company has the bigger mark-up? Explain. What factors would affect the extent to which the makers of Panax could engage in predetory or destroyer pricing to force out competitors in this market?
- Tomas is the general manager for a local automated car wash. The market he operates is perfectly competitive: Every car wash in the area is charging $7 for a car wash, which is also the marginal cost per wash. What will happen to Tomas’s profits if he changes his price to $8. Why? What about a price of $5? What is his profit-maximizing price?The figure below shows the demand (D, MR) and cost (MC, ATC) curves for the Hand Made Shirt Shop operating in the monopolistically competitive personalized sweatshirts industry. Price per unit Number of personalized sweatshirts MC 18 0 MR D 50 70 75 Units of output ATC According to the figure above, what is the minimum fixed cost consistent with the firm choosing to remain open in the short run? a. $1,150 b. The firm would continue to operate regardless of the level of fixed costs. c. $1,250 d. $100Suppose Tim runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market price is $20 per frying pan. The following graph shows Tim'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 frying pans that Tim produces, including zero frying pans. 175 150 Total Revenue 125 Total Cost 100 Profit -25 -50 3 QUANTITY (Frying pans) 1 4 8 the firrt ceren foring nans he produces, and plot them on the following graph. Use the blue TOTAL COST AND REVENUE (Dollars)