1. A firm under monopolistic competition faces the demand curve: P = 500 - 12.5Q. The firm's marginal cost is MC = 200 + 5Q. a. Find the firm's profit-maximizing output and price. b. Assuming that the firm is at its long-run equilibrium position, estimate total revenue, total cost, and total profit. 2. A monopolist faces th
Revenue maximization occurs when a firm sells at a price: Select one: a. that is equal to its minimum average variable cost b. where its marginal revenue is equal to its marginal cost c. where its marginal revenue is zero d. None of the above Which of the following is true for price discrimination: Select on
Please help with the following questions. 1. Discuss two factors that would increase demand for labor. (Hint: Recall that the demand for factors of production or resources is called a derived demand) 2. If the market price of the good or service that a firm produces increases, what happen to the demand of labor? Explain.
For each of the following graphs, identify the firm's profit-maximizing (or loss-minimizing) output. Is each firm making a profit? If not, should the firm continue to produce in the short run? (See Attachment for Graphs)
Supposing the demand for a gas station is given as PD = 2.06 - .00025QD. The marginal cost is $1.31 per gallon. At his current $1.69 price, he sells 1,500 gallons per week. Is this price-output combination optimal?
Ms. Smith, the owner and manager of the Clear Duplicating Service located near a major university, is contemplating keeping her shop open after 4:00pm. And until midnight. In order to do so, she would have to hire additional workers. She estimates that the additional workers would generate the following total output (where each
1. Explain any two causes of economies of scale or diseconomies of scale. How is the U shape of the long run ATC different from the U shape of the short run ATC? 2. You are given the following information for units 0-6 that are produced by The Kimoneto Corp. of Miami, Florida. The average fixed cost of unit 4 is $38.50; Th
Why is advertising prevalent in many oligopolies, especially when industry demand is inelastic? Illustrate your answer by assuming that with advertising, a firm's demand curve has price elasticity of -1.5 and without advertising, it is -2. If MC is $10, what is the difference in the profit-maximizing price?
Hi, I need help understanding how everything connects together for the following question. Question: For each policy or event listed below, please indicate if it will increase (+), decrease (-), or it is uncertain (+/-) how it will affect the economic variable on the right-hand side. Fearing a recession, Americans begin to
If marginal cost exceeds marginal revenue, then: a. the firm ends up with a net loss b. the firm's average osts exceed average benefits c. the firm should decrease its production level d. none of the statements associated with this question are correct
Use the following data of a firm's total cost schedules to calculate its average variable cost, average fixed cost, average total cost, and marginal cost schedules. Output Total Cost Total Variable Cost Total Fixed Cost 1 $2075.00 $ 75.00 $2000.00 2 2140.00
In your opinion, do you think companies produce less then there potential with current resources, because some workers are not as productive as they efficiently could be?
Output Short Run Average Variable Costs 5 340 10 300 15 280
The Quik Service Walk In Clinic always has three M.D.'s and eight R.N.s working at its 24 hour clinic, which serves customers with minor emergencies and ailments. The clinic has hired an efficiency expert to examine its operations and make suggestions for reducing costs. For some of the medical procedures done at the clinic,
QopyQat specializes in printing business cards and resumes, using the latest laser technology. After analysis of the business, the manager has decided that weekly demand can be approximated by Q = 25,000 - 100P The firm's cost function is C = 25,000 + 13Q + 0.002Q^2 (Q square) where Q is output per week. a) Dete
Suppose the market price of sugar is 22 cents per pound. If a sugar farmer produces 100,000 pounds, the marginal cost of sugar is 30 cents per pound. Is the farmer maximizing profit? If not, should the farmer produce more or less sugar?
Complete the following table using your understanding of the relationship among the various costs. Output TC FC VC ATC AFC AVC MC 0 X 125 0 X X X X 10 X X X X X 5.0 X 20 X X X X X X 3.5 30 235 X X X X X X 40 X X 130 X X X X 50 X X X 5.5 X X X 60 X X X X X 3.0 X 70 350 X X X X X X 80 X X X X X X 7.0
You are the manager of a bakery that produces and packages gourmet bran muffins, and you currently sell bran muffins in packages of three. You want to examine price and output strategy. A typical consumer's inverse demand for your bran muffins is now P = 3 - 0.5Q and your cost of producing bran muffins is C(Q) = Q. Determine th
Two local ready-mix cement manufacturers, Here and There, have combined demand given by Q = 105 - P. Their total costs are given by TCHere = 5QHere + 0.5Q2Here and TCThere = 5QThere + 0.5Q2Here. If they successfully collude: Their total output will be? Their maximum joint profits will be ? If they cannot successfully
Suppose the Kalamazoo Competition-free Concrete's demand function is D(P) = 5,000 -50P, its marginal cost is $40 per cubic yard, and its faces an avoidable fixed cost of $40,000 per year. What is its profit-maximizing sales quantity and price?
Economists at General Industries have been examining operating costs at one of its parts manufacturing plants in an effort to determine whether the plant is being operated efficiently. From weekly cost records, the economists developed the following cost-output information concerning the operation of the plant: a. AVC (averag
Output is produced according to Q = 4L + 6K, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $12 and the price of L is $6, then the cost minimizing combination of K and L capable of producing 60 units of output is:
The MorTex Company assembles garments entirely by hand even though a textile machine exists that can assemble garments faster than a human can. Workers cost $50 per day, and each additional laborer can produce 200 more units per day (ie. marginal product is constant and equal to 200). Installation of the first textile ma
A firm's cost curves are given in the following table. q TC TFC 0 100 100 1 130 100 2 150 100 3 160 100 4 172 100 5 185 100 6 210 100 7 240 100 8 280 100 9 330 100 10 390 100 a. Use
The MorTex Company assembles garments entirely by hand even though a textile machine exists that can assemble garments faster than a human can. Workers cost $50 per day, and each additional laborer can product 200 more unit per day (i.e., marginal product is constant and equal to 200). Installation of the first textile machine o
Use the following information to answer the questions below: Q1 = 500 - 10P Q2 = 700 - 40P Q = 1,200 - 50P where Q1 is the quantity demanded for group 1, Q2 is the quantity demanded for group 2, and Q is the sum of the two demands for the two types of consumers. The marginal cost of serving either group is $10. a. Com
Assume a monopolist with the following demand and cost relationships. Q = 400 - 20P TC = 10 + 5Q + Q^2 (Where "^" means "to the power of") Calculate the following: Profit maximizing price Profit maximizing quantity TR, TC, and Profit at profit maximizing Q and P.
Cleaners R Us. offers professional motel room cleaning to motel owners in Danville, Illinois. The company estimates that each additional room it cleans costs the firm $10. The owner's daughter did a study and estimated the firm's demand could be described by the following equation, where P stands for price, and Q for Quantity de
a) In the Cournot model of competition the best response of an incumbent firm to the entry of a new firm is to reduce output. Explain why this is so.
Given that the total cost function is: TC = 100Q-Q^2+1/3 Q^3 where Q = rate of output and TC = total cost a. Determine the marginal and average cost functions. b. Calculate the output level that minimizes average cost. c. Calculate the output level that minimizes marginal cost.