Homework Answers
No, Firm Y is not using predatory pricing
Reason: Since Firm Y entered the market later than the already present Firm X, and also since Y has a lower cost of production than Firm X, then it means it is justified for Y to charge a lower price because it is able to do so.
Y did not charge a lower price to throw X out of market, but because Y has a lower cost of production than X
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Question 22 1 pts Firm X produces and sells office furniture. For a particular desk it...
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...
Quality Furniture,Inc., produces a wood desk that sells for $500 and a wood table that sells for ...
Quality Furniture,Inc., produces a wood desk that sells for $500
and a wood table that sells for $900. Last year, total overhead
costs of $6,000,000 were allocated based on direct labor costs.
Direct labor costs totaled $2,000,000 last year, and Quality
Furniture produced 15,000 desks and 5,000 tables. Total direct
labor and direct materials costs by product for the last year were
as follows:
Desk
Table
Total
Direct materials
1,575,000
950,000
Direct labor
1,200,000
800,000
2,000,000
Sales price
500
900...
B. A firm produces and sells two commodities. By selling x tons of the first commodity...
B. A firm produces and sells two commodities. By selling x tons of the first commodity the firm gets a price per ton given by p = 96 – 4x. By selling y tons of the other commodity the price per ton is given by q = 84 – 2y. The total cost of producing and selling x tons of the first commodity and y tons of the second is given by C(x, y) = 2x2 + 2xy + y2....
Consider a monopoly (firm A) which produces and sells gadgets. The firm has been around for...
Consider a monopoly (firm A) which produces and sells gadgets. The firm has been around for along time, implying it has no fixed cost for the production. The inverse market demand function is: P= 14−Q, wherePis the price of gadgets, Q is total supply. Firm A’s marginal (and average-)cost for producing gadgets is 2. 1. Suppose now that a firm B considers entering the market. If it enters, the two firms decideabout production volumes simultaneously. Firm B has the same...
1. A business firm produces and sells specialty cakes. Last year, the firm produced 12,000 cakes...
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Widgets R Us currently has a fixed amount of capital, which costs the firm $1,000. Since...
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Question 31 1 pts A firm produces automobiles using labor as its variable input. The output...
Question 31 1 pts A firm produces automobiles using labor as its variable input. The output per labor hour is one automobile and each additional labor hour could produce two additional automobiles. Suppose that the firm increases its labor hours. Is this a sound economic decision? No, since average product of labor (APL) would decrease. Yes, since average product of labor (APL) is at a maximum. No, since marginal cost (MC) is at a minimum. Yes, since average variable cost...
A firm that sells e-books - books in digital form downloadable from the Internet-sells all e-books relating to do-...
A firm that sells e-books - books in digital form downloadable from the Internet-sells all e-books relating to do-it-yourself topics (home plumbing gardening, and so on) at the same price. At present, the company can ean a maximum annual profit of $50,000 when it sells 35,000 copies within a year's time. The firm incurs a 60-cent expense each time a consumer downloads a copy, but the company must spend $100,000 per year developing new editions of the e-books. The company...
QUESTION 1 VC 260 What is the MC of the second unit? O a. 27.5 b....
QUESTION 1 VC 260 What is the MC of the second unit? O a. 27.5 b. 20 O c. 30 d. 25 QUESTION 2 AVC BIRI 25 II 260 What is the MC of the 5th unit? 0 a 40 b. 30 C. 50 d. 60 QUESTION 3 TIH M 11 260 How large are the fixed costs? a. 100 b. 180 c. 120 d. 150 QUESTION 4 Suppose that marginal cost and average total cost for the typical firm...
Question 7-Firms in Competiive Markets: A competitive firm currently produces and sells 500 units of output....
Question 7-Firms in Competiive Markets: A competitive firm currently produces and sells 500 units of output. Its total revenue is $6,000; the marginal cost of producing the 500 unit of output is $14.50; and the average total cost of producing the 500th unit of output is s9.50. Is the firm maximizing its profit, or should it increase or decrease output in order to increase its profit?
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...
Quality Furniture,Inc., produces a wood desk that sells for $500
and a wood table that sells for $900. Last year, total overhead
costs of $6,000,000 were allocated based on direct labor costs.
Direct labor costs totaled $2,000,000 last year, and Quality
Furniture produced 15,000 desks and 5,000 tables. Total direct
labor and direct materials costs by product for the last year were
as follows:
Desk
Table
Total
Direct materials
1,575,000
950,000
Direct labor
1,200,000
800,000
2,000,000
Sales price
500
900...
B. A firm produces and sells two commodities. By selling x tons of the first commodity the firm gets a price per ton given by p = 96 – 4x. By selling y tons of the other commodity the price per ton is given by q = 84 – 2y. The total cost of producing and selling x tons of the first commodity and y tons of the second is given by C(x, y) = 2x2 + 2xy + y2....
Widgets R Us currently has a fixed amount of capital, which costs the firm $1,000. Since this capital cannot be changed at will, the only way to vary the output of widgets is to change the number of workers. The table below shows the total output of widgets when different numbers of workers are assigned to a widget press each day. If no workers are working a press, the output for that press is zero. Each worker hired by Widgets...
Question 31 1 pts A firm produces automobiles using labor as its variable input. The output per labor hour is one automobile and each additional labor hour could produce two additional automobiles. Suppose that the firm increases its labor hours. Is this a sound economic decision? No, since average product of labor (APL) would decrease. Yes, since average product of labor (APL) is at a maximum. No, since marginal cost (MC) is at a minimum. Yes, since average variable cost...
A firm that sells e-books - books in digital form downloadable from the Internet-sells all e-books relating to do-it-yourself topics (home plumbing gardening, and so on) at the same price. At present, the company can ean a maximum annual profit of $50,000 when it sells 35,000 copies within a year's time. The firm incurs a 60-cent expense each time a consumer downloads a copy, but the company must spend $100,000 per year developing new editions of the e-books. The company...
QUESTION 1 VC 260 What is the MC of the second unit? O a. 27.5 b. 20 O c. 30 d. 25 QUESTION 2 AVC BIRI 25 II 260 What is the MC of the 5th unit? 0 a 40 b. 30 C. 50 d. 60 QUESTION 3 TIH M 11 260 How large are the fixed costs? a. 100 b. 180 c. 120 d. 150 QUESTION 4 Suppose that marginal cost and average total cost for the typical firm...
Question 7-Firms in Competiive Markets: A competitive firm currently produces and sells 500 units of output. Its total revenue is $6,000; the marginal cost of producing the 500 unit of output is $14.50; and the average total cost of producing the 500th unit of output is s9.50. Is the firm maximizing its profit, or should it increase or decrease output in order to increase its profit?
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