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- The figure depicts the demand curve of a firm producing cars, together with its marginal cost, average cost, and isoprofit curves. Based on this figure, which of the following statements are correct? 8,000 Price, Marginal cost ($) 0 E Quantity of cars, Q At A, the firm makes positive profits. The firm makes the same profit at B and D. O Profit margin is the same at B and D. O The slope of the isoprofit is zero at D. MC Isoprofit A Isoprofit B AC 100The diagram depicts the cost curves and the marginal revenue curve of a price-taking firm that produces cherries. Identify each item in the graph of this cherry producer. There are more labels than boxes, The average total cost (ATC), marginal cost (MC), and marginal revenue (MR) curves are already labeled. t $ ATC MC MR PM BAM tion docx eic Answer Bank ATC at the profit-maximizing output profit-maximizing output minimum ATC Quantity of cherries 2.heic output at the minimum ATC market price losses.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.
- 1. The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell in order to earn a profit of $10,000 per month. The price of each television set is $300, the average variable cost is $100, and the fixed costs are $5,000 per month. a. What is the required sales volume for Abner Corporation to earn a profit of $10,000 per month? b. If the corporation were to sell each television set at $350 rather than $300, what would be the required sales volume? c. If the price is $350 but the average variable cost decreased to $85 rather than $100, what would be the required sales volume now?Don't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?Everett also works in the perfectly competitive manicure industry. The market price is $20 and he does 15 manicures a day. Given that his average total cost is $22, his total revenue is $300, and fixed costs are equal to $150, we know that Everett's Select one: a. average profit is - $4.00 b. average variable cost is $12 c. marginal revenue is $22 d. average fixed cost is $1.33
- Suppose Rian operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a market price equal to $25 per romper. The following graph shows Rian's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero through seven (including zero and seven) that Rian produces. Ⓡ? TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 # QUANTITY (Rompers) Total Cost Total Revenue A Profit3. Profit maximization using total cost and total revenue curves Suppose Bob runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Bob's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Bob produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 O ☐ ☐ 0 1 2 3 4 5 QUANTITY (Teddy bears) ☐ 6 Total Cost 7 8 O Total Revenue Profit ?Restaurants offer related but differentiated products to their consumers. In the long run, new restaurants enter the market and imitate the cuisineand atmosphere of successful competitors. Howwould you expect a restaurant to set its prices inthe long run? Describe the relationship betweenprice and average total cost. Does a restaurantearn economic profits?
- Suppose Kevin runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Kevin's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Kevin produces. Calculate Kevin's marginal revenue and marginal cost for the first seven teddy bears 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. Kevin's profit is maximized when he produces ___ teddy bears. When he does this, the marginal cost of the last teddy bear he produces is ___ , which is (greater/less) than the price Kevin receives for each teddy bear he sells. The marginal cost of producing an additional teddy bear (that is,…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…Consider 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
