5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 50 40 30 AVC 20 10 MC 0. 0. 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) PRICE (Dollars per oven)
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- The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. (?) PRICE (Dollars per romper) 50 45 40 3.5 30 20 15 10 10 5 0 + 0 2 MC ATC AVC 4 6 8 12 14 16 QUANTITY (Thousands of rompers per day) 10 18 H 20 Profit or LossMaria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price (P) Per Hour (Q) 0 123 456 7 8 $6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 Total Cost (TC) $2.00 6.00 9.00 11.50 13.50 15.00 16.00 17.50 20.00 loaves of ciabatta bread per hour. (Enter your response as an integer.) a. To maximize profits, Maria should sell Maria should charge a price of $ (Enter your response rounded to two decimal places.) Maria's maximum profit is $ (Enter your response rounded to two decimal places.) b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is $ (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is $. (Enter your response rounded to two decimal places.)Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Price Total Cost Hour (Q) (P) (TC) $6.00 $1.50 1 5.50 5.00 2 5.00 7.50 3 4.50 9.50 4 4.00 11.00 3.50 12.00 6 3.00 12.50 7 2.50 13.50 8 2.00 15.50 a. To maximize profits, Maria should sell loaves of ciabatta bread per hour. (Enter your response as an integer.)
- Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price Total Cost Per Hour (Q) (P) (TC) $1.50 $6.00 1 5.50 6.00 5 00 4 50 9.50 3 12.50 4.00 15.00 5 3.50 17.00 6 3.00 18.50 7 2.50 20.50 8 2.00 23.50 a. To maximize profits, Maria should sell loaves of ciabatta bread per hour. (Enter your response as an integer.) Maria should charge a price of $ (Enter your response rounded to two decimal places.) Maria's maximum profit is S (Enter your response rounded to two decimal places.) b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is S: (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is S (Enter your response rounded to two decimal places.)The following graph plots daily cost curves for a firm operating in the competitive market for fitness trackers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE(Dollars pertracker) 100 90 70 60 50 40 20 10 0 0 MO ATC AVC 50 60 70 80 10 20 30 40 QUANTITY (Thousands of trackers per day) 90 100 Profit or Loss In the short run, given a market price equal to $45 per tracker, the firm should produce a daily quantity of trackers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Price Per Hour (Q) (P) 0 $6.00 1 5.50 2 5.00 3 4.50 4 4.00 5 3.50 6 3.00 7 2.50 8 2.00 Total Cost (TC) $2.00 6.50 10.00 13.00 15.50 17.50 19.00 21.00 24.00 loaves of ciabatta bread per hour. (Enter your response as an integer.) a. To maximize profits, Maria should sell Maria should charge a price of $ Maria's maximum profit is $ (Enter your response rounded to two decimal places.) (Enter your response rounded to two decimal places.) (Enter your b. The marginal revenue when selling the profit-maximizing number of loaves of ciabatta bread is $ response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is $. (Enter your response rounded to two decimal places.)
- The graph shows the short-run cost curves of a toy producer. The market has 1,000 identical toy producers. The market price of a toy is $21. In the short run, the firm produces toys a week. 24- 21- 18- 15- 12- 9- 0 500 1000 1500 2000 MC ATC AVC 2500TOTAL COST AND REVENUE (Dollars) 100 Total Cost ם Total Revenue 75 50 -25 A 50 0 1 2 5 QUANTITY (Shirts) A A Profit Calculate Neha's marginal revenue and marginal cost for the first seven shirts she produces and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. (?) COSTS AND REVENUE (Dollars per shirt) 30 25 225 20 15 10 о OO 2 3 A 5 6 QUANTITY (Shirts) Marginal Revenue + Marginal Cost Neha's profit is maximized when she produces 10 shirts. When she does this, the marginal cost of the previous shirt she produces is $ which is than the price Neha receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is S than the price Neha receives for each shirt she sells. Therefore, Neha's profit- maximizing quantity corresponds to the intersection of the which is curves. Because Neha is a price taker, this…JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
- Price and cost (dollars per student) $150 120 88 76 72 ATC 40 - MC MR 24,000 30,000 36,000 Quantity of students enroiled 15,000 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "I think the course should be priced so that the maximum number of students enroll." Which price should this faculty member favor? O A. $0 В. $40 C. $88 D. $150V See Hint Suppose that Juan sells burritos. The total cost of production, based on the number of burritos produced, is shown in the following table. Number of burritos Total cost ($) 1. 8) 2. 10 3) 13 4. 18 25 34 7. 45 Suppose that the price is $6. Assuming profit maximization, how many burritos will Juan sell? asopdneDon't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?