Suppose a firm faces a fixed price of output,
Suppose a firm faces a fixed price of output,
Homework Answers
Suppose that a perfectly competitive firm faces a market price of $ 12 12 per unit,...
Suppose that a perfectly competitive firm faces a market price of $ 12 12 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1 comma 800 1,800 units. If the firm produces 1 comma 800 1,800 units, its average variable costs equal $ 7.00 7.00 per unit, and its average fixed costs equal $ 1.00 1.00 per unit. What is the firm's profit-maximizing (or...
Suppose the firm faces a price of $38, an average variable cost of $29, and has...
Suppose the firm faces a price of $38, an average variable cost of $29, and has an average fixed cost of $5. In the short-run, the firm A. will earn an economic profit B. will be unable to determine what to do c. will just cover cost D. none of the above
Suppose a price searching firm faces a demand curve given by Q = 30−.5P, and has...
Suppose a price searching firm faces a demand curve given by Q = 30−.5P, and has an average cost curve given by AC = 8. a. Find the equations for the marginal revenue curve and the marginal cost curve. b. Find the profit maximizing level of output and the profit maximizing price. At this combination, what is the level of firm profit? What is the level of deadweight loss?
Consider a price-taking firm that has total fixed cost of $500 and faces a market-determined price...
Consider a price-taking firm that has total fixed cost of $500 and faces a market-determined price of $10 per unit for its output. The wage rate is $175 per unit of labor, the only variable input. Using the following table, fill in the columns and answer the question below. (1) (2) (3) (4) (5) (6) Units of labor Output Marginal product Marginal revenue product Marginal cost Profit 1 10 2 30 3 60 4 100 5 150 6 190 7...
Question 28 (3 points) Suppose a firm faces a constant market price of $13 regardless of...
Question 28 (3 points) Suppose a firm faces a constant market price of $13 regardless of the amount of quantity it produces. If the firm doubles its output from 3 units to 6 units, what will happen to total revenues? It cannot be determined from the information provided increase by more than $39 increase by exactly $39 There will be no change in total revenues increase by less than $39
Suppose that a firm in a perfectly competitive market faces the following prices and costs: Price...
Suppose that a firm in a perfectly competitive market faces the following prices and costs: Price Quantity Total Cost $6 p $$4 $6 1 $6 $6 2 $9 $6 $13 $6 $18 $6 IS $24 $6 16 $3 Marginal revenue equals marginal cost when the firm produces 5 units. 4 units. 2 units. 3 units. Which of the following is correct? In the short run, FC can decrease with less output. In the short run, FC can decrease with more...
Suppose a perfectly competitive firm faces this situation: P= $15, output = 700, MC = $14,...
Suppose a perfectly competitive firm faces this situation: P= $15, output = 700, MC = $14, AVC = $10, and ATC = $14. Which statement is correct? O O O O The firm is productively but not allocatively efficient. The firm is allocatively efficient but not productively efficient. The firm is both productively and allocatively efficient. The firm is neither allocatively efficient nor productively efficient. Suppose that the twenty-third worker generates a marginal product equal to eight boxes of output...
An individual price-taking firm faces a vertical, perfectly elastic demand curve for its output True False
An individual price-taking firm faces a vertical, perfectly elastic demand curve for its output True False
Suppose a perfectly competitive firm faces the following situation: P = $8, output = 2,000, ATC...
Suppose a perfectly competitive firm faces the following situation: P = $8, output = 2,000, ATC = $6.50, and MC = $7. Which statement is an accurate description of the firm's situation? a.The firm incurs profits but is not maximizing its profits. b.The firm is maximizing profits. c.The firm incurs losses and is minimizing its losses. d.The firm incurs losses but is not minimizing its losses.
suppose a firm faces a demand function Q= 400-2P 3. (20 points) Suppose a firm faces...
suppose a firm faces a demand function Q= 400-2P
3. (20 points) Suppose a firm faces a demand function 0 = 400 - 2P. Costs are C = 138 + 200. (a) Set up the revenue function R. (b) Find Q and P that maximize profit. (c) Suppose fixed costs increase to 200. Show (with math) how this change affects the profit maxi- mizing solution. Who bears the increase in cost? (d) Suppose variable costs increase to 40. Show (with...
Question 28 (3 points) Suppose a firm faces a constant market price of $13 regardless of the amount of quantity it produces. If the firm doubles its output from 3 units to 6 units, what will happen to total revenues? It cannot be determined from the information provided increase by more than $39 increase by exactly $39 There will be no change in total revenues increase by less than $39
Suppose that a firm in a perfectly competitive market faces the following prices and costs: Price Quantity Total Cost $6 p $$4 $6 1 $6 $6 2 $9 $6 $13 $6 $18 $6 IS $24 $6 16 $3 Marginal revenue equals marginal cost when the firm produces 5 units. 4 units. 2 units. 3 units. Which of the following is correct? In the short run, FC can decrease with less output. In the short run, FC can decrease with more...
Suppose a perfectly competitive firm faces this situation: P= $15, output = 700, MC = $14, AVC = $10, and ATC = $14. Which statement is correct? O O O O The firm is productively but not allocatively efficient. The firm is allocatively efficient but not productively efficient. The firm is both productively and allocatively efficient. The firm is neither allocatively efficient nor productively efficient. Suppose that the twenty-third worker generates a marginal product equal to eight boxes of output...
An individual price-taking firm faces a vertical, perfectly elastic demand curve for its output True False
suppose a firm faces a demand function Q= 400-2P
3. (20 points) Suppose a firm faces a demand function 0 = 400 - 2P. Costs are C = 138 + 200. (a) Set up the revenue function R. (b) Find Q and P that maximize profit. (c) Suppose fixed costs increase to 200. Show (with math) how this change affects the profit maxi- mizing solution. Who bears the increase in cost? (d) Suppose variable costs increase to 40. Show (with...
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