The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. The price of fertilizer must be equal to marginal cost. The price of fertilizer must be less than average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves.
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- The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. O The price of fertilizer must be less than marginal cost. O The price of fertilizer must be less than average total cost. O The price of fertilizer must be equal to average variable cost. The following graphs show the cost curves faced by a typical firm, the demand for fertilizer, and possible price and supply curves. Firm Market Demand ATC -- ---- P. TAyd MC Quantity Quantity If firms in the market are producing output but are currently making economic losses, illustrates the present situation for the typical firm in the market, and S ▼ indicates the corresponding supply curve. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. O The…4. A puppet maker calculates that the yearly cost of running his manufactory is $14,000. Additionally it costs him $60 to create each of his puppets. The price per puppet is determined by the following price-demand equation: p=500–2x a. Find the Cost equation for the total number of puppets produced and sold Find the Revenue equation for the total number of puppets produced and sold b. c. How many puppets does he need to make and sell to break even? d. Use the Cost and Revenue equations to find the Profit function What is the price that he needs to charge if he wants to sell exactly 80 puppets? e.A business's marginal cost has a minimum value of $3; its average variable cost has a minimum value of $6; and its average total cost has a minimum value of $7. Given this information, the business should exit at any price below and shut down at any price below Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b с e Question 2 f $3; $6 $6; $3 $7; $6 $6; $7 $3; $7 $7; $3
- Suppose a local retailer is running the following sale on jugs of detergent: $20 each or 3 for $56. The total cost of purchasing two jugs is. The marginal cost of the third jug is _____. $60; $56 0 $56; $16 $56; $60 $40; $16 O $16; $40 OBrody's firm produces trumpets in a perfectly competitive market. The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.-Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer. -At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work. -Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200. -Brody's profit-maximizing quantity of saxophones -Brody's loss, completely shaded Quantity Total Variable cost 6 $120 7 $145 8 $165 9 $220 10 $290 11 $390Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a price-taker market, and the market price is $10 per shirt. The following graph shows Larry's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Larry produces, including zero shirts. 125 100 TOTAL COST AND REVENUE (Dollars) 25 ☐ Total Cost ☐ -50 0 1 2 3 4 5 6 7 8 QUANTITY (Shirts) Total Revenue A Profit (?) Calculate Larry's marginal revenue and marginal cost for the first seven shirts he 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. 25 2 COSTS AND REVENUE (Dollars per shirt) 0 1 2 3 5 6 7 8 QUANTITY (Shirts) Marginal Revenue Marginal Cost Larry's profit is maximized when he produces is shirts. When he does this, the marginal cost of the previous shirt he…
- The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market.The formula for total fixed cost is Select one O A TFC TVC-TC O B. TFC-TC/TVC C TFC=TC-TVC. O D TFC-TC TVC100 90 80 70 60 ATC 50 40 30 20 AVC МС О 10 + 0 0 5 10 15 20 30 35 40 45 50 QUANTITY (Thousands of shirts) or each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume hat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing uantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will nake a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Profit or Loss? Produce or Shut Down? Shut down 10 20,000 Loss Shut down 20 10,000 Loss Shut down 32 5,000 Loss Either 0 or 37,500 Shut down 40 Loss 25 COSTS (Dollars)
- Jeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. What is the break-even price and quantity? What is the shut-down price and quantity? If the price at which Jeannette can sell wheat is $16/bu., will Jeannette earn a profit in the short run? In the short run, should she produce or shut down? If the price at which Jeannette can…Jeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. What is the break-even price and quantity, shut-down price and quantity? If the price at which Jeannette can sell wheat is $16/bu., will Jeannette earn a profit in the short run? In the short run, should she produce or shut down? Q VC TC MC AVC ATC 0 0 10 160 20 220 30 300 40 420 50 580…Jeannette has a wheat farm, and the wheat market is perfectly competitive. The market price of a bushel of wheat is $18, and Jeannette’s machinery costs $140 per day and is the only fixed input. Her variable cost consists of the wages paid to the farm workers, and the fertilizer. The variable cost per day associated with each level of output is given by the table below. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output. Q VC TC MC AVC ATC 0 0 10 160 20 220 30 300 40 420 50 580 60 780 70 1,020