The accompanying graph illustrates a perfectly competitive firm's total revenue (TR) curve and total cost (TC) curve. The firm produces lamps, so assume it can only produce whole units of lamps (e.g., it can produce 5 or 6 lamps but not 5.5 lamps). 20 19 max, profit TR 18 17 16 Move the maximum profit line by adjusting its endpoints to 15 14 TC represent the maximum profit the firm can possibly earn. 13 12 11 10 When the firm is producing 4 lamps, profit is 8. 7 when the firm is producing 9 lamps. 6 4 When the firm is producing 2 lamps, profit is 3 when the firm is producing 8 lamps. greater than 1 2 3 4 6 7 8 9 10 Quantity less than the same as Price
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- Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price Total Cost Per Hour (Q) (P) (TC) $1.50 $6.00 1 5.50 6.00 5 00 4 50 9.50 3 12.50 4.00 15.00 5 3.50 17.00 6 3.00 18.50 7 2.50 20.50 8 2.00 23.50 a. To maximize profits, Maria should sell loaves of ciabatta bread per hour. (Enter your response as an integer.) Maria should charge a price of $ (Enter your response rounded to two decimal places.) Maria's maximum profit is S (Enter your response rounded to two decimal places.) b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is S: (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is S (Enter your response rounded to two decimal places.)16 5 Use the table below to answer questions about Christina's Christmas Wreaths. Christina operates in a perfectly competitive market for wreaths. Christina's Costs and Revenue Quantity Average Variable (wreaths) Cost (dollars) 5 $14.00 6 - 15.00 7 CALL/M 16.00 8 22.00 9 28.00 10 34.00 wreaths Average Total Cost (dollars) $24.00 23.00 23.00 28.00 34.00 39.00 $ Instructions: In part a, enter your answer as a whole number. In parts b and c, round your answers to two decimal places. a. What is the profit-maximizing level of output for Christina's Christmas Wreaths? Marginal Cost (dollars) $20.00 b. What is the profit per unit if the profit-maximizing level of output is produced? $ olo L c. What is the total economic profit generated by producing the profit-maximizing output? $ % Marginal Revenue (dollars) $63.00 63.00 63.00 63.00 63.00 63.00 22.00 23.00 BIEL 63.00 82.00 TAO 84.003. Profit maximization using total cost and total revenue curves Suppose Ana runs a small business that manufactures shirts. Assume that the market for shirts is a perfectly competitive market, and the market price is $20 per shirt. The following graph shows Ana'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 Ana produces, including zero shirts. TOTAL REVENUE, TOTAL COST, AND PROFIT (Dollars) Total Revenue A 125 100 Total Cost ☐ Profit 200 175 150 75 50 ༔་ཎྜ་ ྴ་སྐྱ ིི་ཐྭ་8་མ་° 1 2 3 4 5 6 7 8 QUANTITY OF OUTPUT (Shirts) (?) Calculate Ana'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. Note: Be sure to plot marginal values between the appropriate whole unit values. For instance, plot…
- Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Hour (Q) Price (P) Total Cost (TC) 0 $6.00 $1.50 1 5.50 6.00 2 5.00 9.50 3 4.50 12.50 4 4.00 15.00 5 3.50 17.00 6 3.00 18.50 7 2.50 20.50 8 2.00 23.50 a. To maximize profits, Maria should sell nothing loaves of ciabatta bread per hour. (Enter your response as an integer.)The table below shows the information on Ilham Bakery. Item AmountRevenue in operating the bakery shop RM 80 000Income that could have been earned if working as an employee to others RM 7 000Utility cost RM 1 200Salary of workers RM 15 000Cost of raw materials RM 20 000 What is the economic profit?Using the graph below, calculate the firm's profits at the profit maximizing output Price 408 384 360 336 312 288 264 240 216 192 168 144 120 96 72 48 24 0 0 56 112 168 224 280 336 392 448 504 560 616 672 728 784 840 896 Quantity -PMRMC-AC
- 3. The components of marginal revenue Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced seven trucks, but then decided to increase production to eight trucks. The following graph gives the demand curve faced by Jabari's Hook NLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $100,000 to $50,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial seven engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. PRICE (Thousands of dollars per fire engine) 275 250 225 200…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 SearchMaria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Price Total Cost Hour (Q) (P) (TC) $6.00 $1.50 1 5.50 5.00 2 5.00 7.50 3 4.50 9.50 4 4.00 11.00 3.50 12.00 6 3.00 12.50 7 2.50 13.50 8 2.00 15.50 a. To maximize profits, Maria should sell loaves of ciabatta bread per hour. (Enter your response as an integer.)
- E 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.3. The components of marginal revenue Asim's HockNLadder is the only company selling fire engines in the fictional country of Alexandrina. Asim initially produced seven trucks, but then decided to increase production to eight trucks. The following graph gives the demand curve faced by Asim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Asim must lower the price from $100,000 to $50,000 per truck. Notice that Asim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial seven engines because they are all sold at the lower price. use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. PRICE (Thousands of dollars per fire engine) 250 221 200 179 150 125…Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250Answer the following questions:a. What is the profit-maximizing level of output? Calculate Apex’s profit.b. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?c. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case?d. Comment on your answers to parts (2) and (3