Two firms face a demand equation given by P=200,000 -6(Q1 + Q2) where Q1 and Q2 are the outputs of the two firms. The total cost equations for the two firms are given by: TC1 = 8000Q1 and TC2 = 8000Q2. If each firm sets its own output rate for profit maximization, and the other firm holds constant, what is the optimal outp
The average variable cost equation for a competitive firm is: AVC = 10 - 2Q + 0.5Q^2 1. At what output is AVC at a minimum? 2. If the market price of the firm's output is $7 per unit, should the firm produce or shut down?
Please I need help with this question. I have attached it. Thank you! 1. The Haverford Company is considering three types of plants to make a particular electronic device. Plant A is much more highly automated than plant B, which is in turn more highly automated than plant C. For each type of plant, average variable cost is c
See the attached file. I. A company has fixed cost of $200,000. The sales price of its output is $56 per unit. It has variable costs of $31 per unit. The company is going to install new equipment which will cut the fixed costs to $150,000 but which will increase variable costs to $34 per unit. The sales price will remain at $5
You're the CFO of Widgets Inc. The CEO comes to you concerned, because while sales seem to be very strong, there does not seem to be profits to pay dividends demanded by the shareholders. He wants to know if you could let him know how well the company is using its assets, and how the net profit compares to net sales. You reme
Answer the following question in your own words without quoting anyone: In economics, when you plot cost and revenue on the Price-Quantity axis, the profit maximization condition is when marginal cost is equal to marginal revenue. This is a crucial notion to understand. Without it one can't effectively analyze profits. Does t
Question 1 Consider the following short-run production function (where L = variable input, Q = output): Q = 10L – 0.5L2 Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of the variable input (L) as it needs at $20 per unit. a. Determine the marginal revenue product fun
Source of Capital Book Value Market Value After-tax cost Long-term debt $4,000,000 $3,840,000 6.0% Preferred stock 40,000 60,000 13.0% Common stock equity 1,060,000 3,000,000 17.0% Totals $5,100,00
A- A firm with market power produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces a demand function given by P = 50 - Q. What is the marginal revenue for the firm? b- A firm with market power produces a chip at a marginal cost of $10 per unit and zero fixed costs. It faces a demand function given
The demand function for a product sold by an oligopolist operating in the short run is given below: QD = 370 - P The firm's marginal cost function is given below: MC = 10 + 4Q Calculate the profit-maximizing price and quantity, if the firm operates in the short run.
The Goldberg-Scheinman Publishing Company is publishing a new managerial economics text for which it has estimated the following total fixed and average variable costs. Total Fixed Costs: Copy Editing 10,000 Typesetting 70,000 Selling and Promotion 20,000 Total fixed costs: 100.000 Average Variable Costs
Tinley Paper, Inc. produces uncoated paper used in a wide variety of industrial applications. Newsprint, a major product, is sold in a perfectly competitive market. The following relation exists between the firm's newsprint output and total production costs: Total Output (tons) Total Cost ($) 0
I have 2 tables that deal with marginal revenue, average costs, average fixed costs, and I'm not sure how to go about completing them. I get half way through, but I get confused. Any help would be greatly appreciated.
Total Hours Hours Studying GPA Hours Working Income 60 60 4.0 0 $0.00 60 40 3.0 20 $100.00 60 30 2.0 30 $150.00 60 10 1.0 50 $250.00 60
Indicate whether each of the following statements is true or false and explain why. a) A competitive firm that is incurring a loss should immediately cease operations. b) A pure monopoly does not have to worry about suffering losses because it has power to set its prices at any level. c) In the long run, firms operation in perfe
For each of the following events, indicate whether the AD or the AS curve shifts. Briefly explain the reasoning behind your choice. a. The government increases defense spending. b. Oil prices rise dramatically. c. Stock prices and housing values fall. (Hint - this would decrease household wealth.) d. Our largest
You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation. The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage (per worker) is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day.
Competitive industry, market determined price =$12, Output = 50 units, ATC = $10, Marginal cost = $15, AVC = $7 Is this firm making the right profit maximizing decision? If yes, why and if not, what should this firm do?
Problem 2. A firm has following short-run production function: Q=50L+6L^2-0.5L^3 Q=quality of output per week L= number of worker a. When dose the law of diminishing returns take effect? b. Calculate the wage of the values for labor over which stage I, II, and III occurs. C. Assume each worker is paid $10 per hour a
1. Which of the following industries would you classify as an oligopoly? Which would you classify as monopolistically competitive? Explain your answer. If you are not sure, what information do you need to know to decide? a. Athletic shoes b. Restaurants c. Watches d. Aircraft e. Ice cream 1) How does a firm in an oligo
Sir/Ma'am, Can I have some assistance answering this question. Can any firm in a pure competition market earn an economic profit in the long term? Why or why not? To best expalin please consider: *As long as losses are being sustained in an industry, firms will shut down and leave the industry, thus reducing supply. A
A mail-order firm processes 5,000 checks per month. Of these, 65% are for $50 and 35% are for $70. The $50 checks are delayed two days on average; the $70 checks are delayed three days on average. a. What is the average daily collection float? How do you interpret your answer? b.What is the weighted average delay? use the res
Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 400 Average value of payment $1,400 Variable lockbox fee (per transaction) $ .75 Daily interest rate
The following production table provides estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y. Assume for purposes of this problem that inputs X and Y cannot be used in partial units, so, for example, 1.5 units of X cannot be combined with 3.75 units of Y, etc. Units of Y
Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with c
2. You hire an intern from Southern University to help you analyze your production process, and she uses your historical cost records to estimate that your total cost function is C(Q) = 100 + 2Q + 3Q2. Using this equation, answer the following and show your logic and calculations. a. How much is your firm's profit or loss at
Carefully explain if the following statements are true, false, or uncertain. a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over mo
Can anyone help? I was trying to figure this one out but I can't figure out how you can determine the amount of employees needed without knowing how much the employer is willing to pay a single employee. I don't know, it is just confusing to me. Common sense would tell you that if you reduce the number of employees you can affor
Prepare a table that compares and contrasts the various elements of the four market structures. Format the table as follows: 1) Column Headings should be the four market structures: a) Perfect competition b) Monopoly c) Monopolistic competition d) Oligopoly 2) Use the following Row Headings to
Determine the difference between Total Variable Costs (TVC), Average Variable Costs (AVC) and Marginal Costs (MC). What do we mean by these different types of costs? How are they calculated? What would be an example of each?