Homework Answers
Option(d) is the answer
It depends on the marginal cost of producing more dresses and the marginal revenue she will earn from selling more dresses.
Explanation: If MC = MR, then only she will be able to make profit.
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A dress maker currently produces 15 dresses per week and sells them for a profit. She...
What does Economics primarily study? Select one: a. how prices are set in the marketplace b....
What does Economics primarily study? Select one: a. how prices are set in the marketplace b. how limited resources are allocated to satisfy unlimited wants c. how we deal with unemployed resources d. how firms compete for profits in the marketplace Which of the following statements best describes scarcity? Select one: a. Even in the wealthiest of countries, the desire for material goods is greater than productive capabilities. b. Scarcity and poverty are basically the same thing. c. The absence...
Darnell's profit is maximized when she produces _______ frying pans.
3. Profit maximization using total cost and total revenue curves Suppose Darnell runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Darnell's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Darnell produces.QUANTITY . TOTAL COST01011522033044557061007135 Calculate Darnell's marginal...
Firm X produces and sells office furniture. For a particular desk it sells the price it...
Firm X produces and sells office furniture. For a particular desk it sells the price it charges is $200, its average total cost is $170, and its marginal cost is $160. Firm Y decides to enter the market and sells a desk that is virtually identical. It decides to charge a price of $150, while its average total cost is $140, and its marginal cost is $130. Is Firm Y engaging in predatory pricing? Yes, Firm Y is using predatory...
Sherene Nili manages a company that produces wedding gowns. She produces both a custom product that...
Sherene Nili manages a company that produces wedding gowns. She produces both a custom product that is made to order and a standard product that is sold in bridal salons. Her accountant prepared the following forecasted income statement for March, which is a busy month: Custom Dresses Standard Dresses Total Number of dresses S55.000 S 11.000 21.000 Walerials Labar Machine depreciation Rent Heal and light Other production costs Marketing and administration Total costs Operating profit $35,000 $ 9,000 10,000 400...
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the...
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Hannah in giving haircuts is her time. As she gives more haircuts, Hannah must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If...
. Opportunity cost and production possibilities Yvette is a skilled toy maker who is able to...
. Opportunity cost and production possibilities Yvette is a skilled toy maker who is able to produce both trucks and balls. She has 8 hours a day to produce toys. The following canie ishtiws s hoe deil cinutput resulting from various possible 19 On the following graph, use the blue plot Yvette's initial production (circle symbol) to Suppose Yvette is currently using combination D, producing one truck per day. Her opportunity cöst of producing a second per day is per...
Knowledge Check Eva pays $3.000 per month to rent her house. She has a garage but...
Knowledge Check Eva pays $3.000 per month to rent her house. She has a garage but is considering turning the space into a halr styling studio. She expects to earn $3.000 a month from this new business. Instead, she could sublease the garage space to a neighbor for $800 per month. As part of the terms of sublease, her neighbor will pay an additional $100 per month for utilities. All other costs are unaffected. Eva is now analyzing the costs...
Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the...
Austin Enterprises makes and sells three types of dress shirts.
Management is trying to determine the most profitable mix. Sales
prices, demand, and use of manufacturing inputs follow.
Basic
Classic
Formal
Sales price
$
32
$
80
$
195
Maximum annual demand (units)
19,000
12,000
29,000
Input requirement per unit
Direct material
0.5
yards
0.3
yards
0.6
yards
Direct labor
0.9
hours
3
hours
8
hours
Costs
Variable costs
Materials
$
19
per yard
Direct labor
$
15
per hour...
Part VI Multiple Choice: Imperfect Competition 13. If a firm with market power maximizes profit by...
Part VI Multiple Choice: Imperfect Competition 13. If a firm with market power maximizes profit by producing at the unit elastic point on the demand curve, then a. it has no direct competitors. b. its marginal cost must be zero at the profit-maximizing level of output. c. demand must be perfectly elastic. d. it cannot be in long-run equilibrium. 14. Which of the following statements is not always true for a monopolist in short-run equilibrium? a. E 1 b, TR>...
NAME PRINT LAST NAME, FIRST NAME SECTIONE MONOPOLY is a pure monopoly when: İt is the...
NAME PRINT LAST NAME, FIRST NAME SECTIONE MONOPOLY is a pure monopoly when: İt is the only seller of a unique product and barriers to entry pneventother selen from entering the market in the long run it is the only seller of a product that has the market in the long run is unrestricted b. very few close substitutes and entry into C. there are only a few other very large firms selling similar products. d. it can sell all...
What does Economics primarily study? Select one: a. how prices are set in the marketplace b. how limited resources are allocated to satisfy unlimited wants c. how we deal with unemployed resources d. how firms compete for profits in the marketplace Which of the following statements best describes scarcity? Select one: a. Even in the wealthiest of countries, the desire for material goods is greater than productive capabilities. b. Scarcity and poverty are basically the same thing. c. The absence...
Firm X produces and sells office furniture. For a particular desk it sells the price it charges is $200, its average total cost is $170, and its marginal cost is $160. Firm Y decides to enter the market and sells a desk that is virtually identical. It decides to charge a price of $150, while its average total cost is $140, and its marginal cost is $130. Is Firm Y engaging in predatory pricing? Yes, Firm Y is using predatory...
Sherene Nili manages a company that produces wedding gowns. She produces both a custom product that is made to order and a standard product that is sold in bridal salons. Her accountant prepared the following forecasted income statement for March, which is a busy month: Custom Dresses Standard Dresses Total Number of dresses S55.000 S 11.000 21.000 Walerials Labar Machine depreciation Rent Heal and light Other production costs Marketing and administration Total costs Operating profit $35,000 $ 9,000 10,000 400...
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Hannah in giving haircuts is her time. As she gives more haircuts, Hannah must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If...
. Opportunity cost and production possibilities Yvette is a skilled toy maker who is able to produce both trucks and balls. She has 8 hours a day to produce toys. The following canie ishtiws s hoe deil cinutput resulting from various possible 19 On the following graph, use the blue plot Yvette's initial production (circle symbol) to Suppose Yvette is currently using combination D, producing one truck per day. Her opportunity cöst of producing a second per day is per...
Knowledge Check Eva pays $3.000 per month to rent her house. She has a garage but is considering turning the space into a halr styling studio. She expects to earn $3.000 a month from this new business. Instead, she could sublease the garage space to a neighbor for $800 per month. As part of the terms of sublease, her neighbor will pay an additional $100 per month for utilities. All other costs are unaffected. Eva is now analyzing the costs...
Austin Enterprises makes and sells three types of dress shirts.
Management is trying to determine the most profitable mix. Sales
prices, demand, and use of manufacturing inputs follow.
Basic
Classic
Formal
Sales price
$
32
$
80
$
195
Maximum annual demand (units)
19,000
12,000
29,000
Input requirement per unit
Direct material
0.5
yards
0.3
yards
0.6
yards
Direct labor
0.9
hours
3
hours
8
hours
Costs
Variable costs
Materials
$
19
per yard
Direct labor
$
15
per hour...
Part VI Multiple Choice: Imperfect Competition 13. If a firm with market power maximizes profit by producing at the unit elastic point on the demand curve, then a. it has no direct competitors. b. its marginal cost must be zero at the profit-maximizing level of output. c. demand must be perfectly elastic. d. it cannot be in long-run equilibrium. 14. Which of the following statements is not always true for a monopolist in short-run equilibrium? a. E 1 b, TR>...
NAME PRINT LAST NAME, FIRST NAME SECTIONE MONOPOLY is a pure monopoly when: İt is the only seller of a unique product and barriers to entry pneventother selen from entering the market in the long run it is the only seller of a product that has the market in the long run is unrestricted b. very few close substitutes and entry into C. there are only a few other very large firms selling similar products. d. it can sell all...
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