The key difference is that economic profit factors in implicit costs (sometimes called opportunity costs). Just what do we mean by opportunity costs anyway?
Question 1 : True or False: "In the long run, no matter what the price, a competitive firm should provide the output that minimizes long-run average cost (a.k.a the efficient scale), since that output maximizes profit per unit of output."
Suppose that a firm is currently employing 20 workers, the only variable input at a wage rate of 60.
7. Suppose that a firm is currently employing 20 workers, the only variable input at a wage rate of 60. The average product of labour is 30, the last worker added 12 units to total output, and total fixed cost is R3,600 a. What is marginal cost? b. What is average variable cost? c. How much output is being produced? d. What
After reading the background section to the problem below, answer the question of "which is the better decision as well as (a) and (b). Make sure to show ALL the work/steps to how the answers were derived. -------------------------------------------------------------------------- Background: Charles Lackey operates a ba
Could someone please help with the following multiple choice questions. Your help is GREATLY appreciated! 6. Since World War II, the US national debt as a percentage of GDP a. rose especially in the last ten years. b. rose, mainly as a result of wars. c. remained constant on average over the whole period. d. fell, rose
Over the last 30 years the Organization of Petroleum Exporting Countries (OPEC) has had varied success in forming and maintaining its cartel agreements.
Over the last 30 years the Organization of Petroleum Exporting Countries (OPEC) has had varied success in forming and maintaining its cartel agreements. Explain how the following factors may contribute to the difficulty of forming and/or maintaining its price and output agreements. a. New oil fields are discovered and increased
Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate's machinery costs $100 per day and is the only fixed input. Her variable cost is comprised of the wages paid to the cooks and the food ingredients. The variable cost associated with each level of output is given in the accompa
If price is less than average variable cost at a level of output where marginal revenue is equal to marginal cost, then in the short run the firm
Having a difficult time in understanding the subject of AVC relating decisions of output. Here is the type of question that is giving me difficulty. Please provide some insight. If price is less than average variable cost at a level of output where marginal revenue is equal to marginal cost, then in the short run the firm:
The purpose of economics is to allocate scarce resources in a manner that maximizes society's happiness and to their highest valued use. Do you agree? 1) How do we measure society's happiness ? 2) How is the highest valued use determined ? What are the issues and difficulties you see around trying to achieve these goals ?
The accompanying table shows a car manufacturer's total cost of producing cars. Quantity of cars TC 0 $500,000 1 540,000 2 560,000 3 570,000 4 590,000 5
How can the extent to which the presence of economies and diseconomies of scale in an industry help account for the size and the number of firms in that industry?
How can the extent to which the presence of economies and diseconomies of scale in an industry help account for the size and the number of firms in that industry? That is, if economies of scale are quite extensive in a particular industry, would you expect a large number of relatively small firms or a small number of relatively
The long run is a planning period a. all inputs are fixed b. inputs are neither variable nor fixed c. at least one input is variable and one input is fixed d. all inputs are variable. This is so confusing to me but I feel strongly that this is B The change in total output resulting from a 1- unit increase in the qua
Explain the economic implications of a movement along a nation's offer curve. Also explain why the offer curve is backward bending or forward bending.
Assume a firm employs 10 workers and pays each $15 per hour. Further assume that the MP of the 10th worker is 5 units of output and that the price of the output is $4. According to economic theory, in the short run, a. the firm should hire additional workers. b. the firm should reduce the number of workers employed
Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below. Number of Worker Hours Output Marginal Product Fixed Cost VariableCost TotalCost MarginalCost AverageVariableCost Average Total Cost 0
General Cereals, Inc. (GCI) produces and markets Sweeties!, a popular ready to eat breakfast cereal. In an effort to expand sales in the Secaucus, New Jersey, market, the company is considering a 1 month promotion whereby GCI would distribute a coupon for a free daily pass to a local amusement park in exchange for three box to
What if a firm employs 10 workers and pays each $15 per hour. Further assume that the MP of the 10th worker is 5 units of output and that the price of the output is $4. According to economic theory, in the short run, a. the firm should hire additional workers. b. the firm should reduce the number of workers
A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's product is $150. Output FC VC TC TR Profit/Loss 0 $100 $ 0 $100 $ 0 -$100.00 1 $100 100 $200 $150 -$ 50.00 2 $100 180 $280 $3
Is minimum wage legislation bad for on-the-job training? It has been argued that the minimum wage prevents workers from investing in on-the-job training and discourages employers from providing specific training to low-income workers. Why would the minimum wage have an adverse effect on human capital accumulation for low-inco
An Appliance Service company made house calls and repaired 10 lawn-movers, 2 refrigerators, and 3 washers in an 8-hour day with his standard crew of 3 workers. The average wage for the workers is $12 per hour. The materials cost for a day was $200 while the overhead cost was $50. (a) What is the company's labor productivity,
Use the concepts of economies and diseconomies of scale to explain the shape the firms long- run ATC curve. What is the concept of minimum efficient scale? What bearing can the shape of the long run ATC curve have on the structure of an industry? (show curves/graphs in the solution) MBA level
Woodland Instruments, Inc. operates in the highly competitive electronics industry. Prices for its R2-D2 control switches are stable at $100 each. This means that P = MR = $100 in this market. Engineering estimates indicate that relevant marginal cost relations for the R2-D2 model are: MC= $25 + $0.005Q. Calculate the output
Given the price (P) and output (Q) data in the following table, calculate the related total revenue (TR), marginal revenue (MR), and average revenue (AR) figures, and determine output level that maximizes revenue. Q P TR MR AR 0 $35 1 30
4) You've been hired by an unprofitable firm to determine whether it should shut down its operation. The firm currently uses 70 workers to produce 300 units of output per day. The daily wage (per worker) is $100, and the price of the firm's output is $30. The cost of other variable inputs is $500 per day. Although you don't
Market price is $50. The firm's marginal cost curve is given by: MC = 10 + 2Q a. Find the profit-maximizing ouptut for the firm. Draw the pertinent diagram. b. At this output, is the firm making a profit? Explain your answer and shade the profit/loss on the diagram.
A firm has determined that its variable costs are given by the following relationship: VC = .05Q3 - 5Q2 + 500Q where Q is the quantity of output produced. Determine the output level where marginal costs are minimized. 333.3 33.3 3.33
The Zinger Company manufactures and sells a line of sewing machines. Demand per period (Q) for a particular model is given by the following relationship: Q = 400 - .5P where P is price. Total costs (including a "normal" return to the owners) of producing Q units per period are: TC = 20,000 + 50Q + 3Q2. What are total prof
The Zinger Company sells and produces sewing machines. For a certain model, demand per period (Q) is given by: Q = 400 - .5P (P is price) Producing Q units per period yields a total cost of: TC = 20,000 + 50Q + 3Q2. At what level of output are total profits maximized? a. 750 units b. 75 units c.
Please see attached file. The following information pertains to a perfectly competitive firm that sells its output for $2 in the short run and is one of many demanders of labor. (i) Fill in the blanks in the above table. (ii) How many workers would the firm hire if the wage rate was $10? (iii) Explain why this firm wou
If you can help me solve this that would be helpful...... Q= 2(K) 1/2 (L) 1/2 K= capital equipment L= labor the company spent already $10,000.00 on 4 units of capital equipment in they own. due to economic condtions does not have the flexibilty needed to acquire addtional equipment......IF the workers at this firm ar