Latoya runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $500. Her variable costs are $1,500 for the first thousand posters, $1,200 for the second thousand, and then $800 for each additional thousand posters.
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- Audra runs a movie memorabilia website. Last year, she earned $35,000 in revenue and had explicit costs of $8,000. Audra could have made $35,000 working for a security company and received an additional $10,000 if she had used the company's inputs in a different way. Calculate Audra's economic profit.Tomas is the general manager for a local automated car wash. The market he operates is perfectly competitive. Every car wash in the area is charging $7 for a car wash, which is also the marginal cost per wash. What will happen to Tomas’ profits if he changed his price to $8. Why? What about a price of $5?Conigan Box Company produces cardboard boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for $100 per thousand. Conigan's total and marginal cost curves are:TC = 3,000,000 + 0.001Q2MC = 0.002Qwhere Q is measured in thousand box bundles per year. Calculate Conigan's profit maximizing quantity. Is the firm earning a profit?
- Paulina sells beef in a competitive market where the price is $8 per pound. Her total revenue and total costs are given in the table below. Quantity of Total revenue Total cost beef (lb.) 0 1 2 3 4 ($) 0 8 16 24 32 ($) 4 8 13 19 27 Profit ($) 0 8 pounds Marginal revenue ($) c. What is the profit-maximizing (or loss-minimizing) quantity? Marginal Marginal cost ($) profit ($) a. Complete the table. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. b. At what quantity does marginal revenue equal marginal cost? pounds APrice and cost (dollars) 70 60 50 40 30 20 10 0 MC₁ 50 Quantity MC₂ 100 Demand 150 The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC₁ and MC2 are the marginal cost curves for those two plants. How should the firm allocate total output between the two plants in order to maximize profit?Tomas is the general manager for a local automated car wash. The market he operates is perfectly competitive. Every car wash in the area is charging $7 for a car wash, which is also the marginal cost per wash. What will happen to Tomas’ profits if he changes his price to $8. Why? What about the price of $5? What is his profit-maximizing price?
- Q.5 A firm is making two products A & B. Each unit of A incurs a cost of production to the tune of $150 and that of B incurs a cost of $200. Product A earns a profit of $15/unit and B gets $20/unit. The estimated monthly demand of both A & B is at maximum 500 units. Monthly production budget is set at $50,000.How many units of A & B should the firm make in order to maximize profit. Conduct sensitivity analysis and answer the following questions: 1. State the optimal solution. 2. What is the objective function value? 3. Find out the range of profit for A in the objective function for which the above solution remains optimal. 4. Which constraint/s is/are binding? 5. Interpret the shadow price for production budget.Bill runs a business that makes custom-printed towels. It will cost him $8 each to purchase and print on towels, and he will have to pay a rent of $1,700 per month for him workshop. Based on market research, Bill estimates that he can sell custom towels for $25 each. a) Calculate the number of towels he needs to sell per month to break-even. towels b) Calculate the break-even in dollars (round off to the nearest cent).Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. What is the Total profit for Billy’s Bean Bag Emporium? Include in your answer your calculation
- Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce: Price (S/doughnut) 0.35 p 0.30 0.25 0.20 0.15 0.10 0.05 0 0 10 20 30 40 50 60 Marginal Cost 70 80 90 Quantity (doughnuts/day) Average Total Cost 50 doughnuts per day. the quantity of doughnuts at which average total cost is minimized. the quantity of doughnuts at which average total cost equals the market price. the quantity of doughnuts at which marginal cost equals the market price.The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Buddies Production Costs MC ($) Quantity of Ear Buds 5 10 15 20 25 30 35 40 2.00 2.45 3.55 4.00 5.50 5.98 8.52 pairs ATC ($) 2.00 2.00 2.15 2.50 2.80 3.25 3.64 4.25 Check my work Instructions: In part a, enter your answer as the closest given whole number. In parts b-d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? b. At the profit-maximizing quantity, what is the total cost of producing ear buds? c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? d. Now assume the market price is $5.50 per pair, and Buddies produces the…Suppose you are thinking about starting a lawn service in your area. The lawn service market can be considered perfectly competitive. You own a $200 lawnmower. You have a fixed cost of $90 (maintenance costs on the mower, etc.). Your variable costs are as follows: # of Lawns Mowed Total Variable Costs Fixed Cost 1 $5 90 2 $15 90 3 $30 90 4 $50 90 5 $75 90 6 $105 90 7 $140 90 8 $180 90 9 $225 90 10 $275 90 a) Calculate Total Costs, Average Total Costs, Average Total Costs, Average Variable Costs, and Marginal Costs. b) Suppose that the going rate for lawns is $35 per lawn. How many lawns would you mow?