Microeconomics WA3 1. At its current level of production‚ a profit-maximizing firm in a competitive market receives $12.50 for each unit it produces and faces an average total cost of $10. At the market price of $12.50 per unit‚ the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1000 units. What is the firm’s current profit? What is likely to occur in this market‚ and why? Total rev | 12500 | Total costs | 10000 | TC=ATC(Q) = 10 ( 1000) = 10000 Profit=TR-TC = 12500
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has the following short-run cost curve: ‚000 - 5‚000Q + 100Q2. A. Computer the marginal cost curve for Ajax. B. Given Ajax’s pricing strategy‚ what is the marginal revenue function for Ajax? 4. Unique Creations holds a monopoly position in the production and sale of manometers. The cost function facing Unique is estimated to be TC = $100‚000 + 20Q A. What is the marginal cost for Unique? C. What is the marginal revenue at the price computed in Part (b)? 6. Wyandotte Chemical Company sells
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CONSULTING PROJECT Pricing and Production Decisions at PoolVac‚ Inc. PoolVac‚ Inc. manufactures and sells a single product called the “Sting Ray‚” which is a patent-protected automatic cleaning device for swimming pools. PoolVac’s Sting Ray accounts for 65 percent of total industry sales of automatic pool cleaners. Its closest competitor‚ Howard Industries‚ sells a competing pool cleaner that has captured about 18 percent of the market. Six other very small firms share the rest of the industry’s
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Chapter 14 Working Capital and Current Assets Management Solutions to Problems P14-1. LG 2: Cash Conversion Cycle Basic = Average age of inventories + Average collection period = 90 days + 60 days = 150 days (a) Operating cycle (OC) (b) Cash Conversion Cycle (CCC) = Operating cycle − Average payment period = 150 days − 30 days = 120 days = (total annual outlays ÷ 365 days) × CCC = [$30‚000‚000 ÷ 365] × 120 = $9‚863‚013.70 (d) Shortening either the average age of inventory or the average collection
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Case Exercise – Polo Golf Shirt Pricing: Solution. The given table is completed as below: Quantity Price Total Revenue Marginal Revenue Variable Cost/Unit Total Variable Cost Price Reduction Marginal Profit/Unit Cumm. Marginal Profit 0 $50 $0 $0 $28 $0 1 $48 $48 $48 $28 $28 ($2.00) $20 $20 2 $46 $92 $44 $28 $56 ($2.00) $16 $36 3 $45 $135 $43 $28 $84 ($1.00) $15 $51 4 $44 $176 $41 $28 $112 ($1.00) $13 $64 5 $42 $210 $34 $28 $140 ($2.00) $6 $70 6 $40 $240
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Purchasing a home is unequivocally one of the hardest decisions someone will make. A home loan is a long term commitment and it is the best interest of the person to make sure this is the home they want. Location‚ size‚ style and price are all factors that should affect your decision whether to purchase a certain home or not. However‚ what factors will determine when the right time is to purchase a home and what indicators are there to tell you that financially this a sound decision? These are a
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Question 1 0.5 out of 0.5 points St. Charles Hospital‚ located in an upper-income neighborhood of a large city‚ recently received a restored mansion as a gift from an appreciative patient. The board of directors decided to remodel the mansion and use it as recuperative quarters for patients willing to pay a premium for luxurious accommodations. The cost to the hospital of using the mansion includes Selected Answer: d. both b and c Question 2 0 out of 0.5 points Which
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CHAPTER 24-Monopoly TRUE/FALSE 1. Since a monopoly charges a price higher than marginal cost‚ it will produce an inefficient amount of output. ANS: T DIF: 1 2. If the interest rate is 10%‚ a monopolist will choose a markup of price over marginal cost of at least 10%. ANS: F DIF: 2 3. A natural monopoly occurs when a firm gains ownership of the entire stock of some natural resource and thus is able to exclude other producers. ANS: F DIF: 1 4. Since a monopoly makes excess profits beyond
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minimizing is called MR=MC. This point is where marginal revenue equals marginal cost‚ meaning that cost does not exceed revenue and revenue does not exceed cost. This is a profit-maximizing zone‚ meaning that total cost is not the lowest‚ but is farthest away from the total returns. The optimal point of production for the firm is at the point MR=MC. Marginal revenue is defined as the change in total revenue as a result of producing an additional unit‚ while marginal cost is the increase or decrease of a firm’s
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price 12 b 8 B a 4 A demand 0 0 100 200 300 400 500 600 700 800 Quantity The minimal price and shutdown point – repetition lecture V P MC AC AVC P = MR Pmin Pshutdown Qshut Qmin QE Q Demand and Marginal Revenue Faced by a Competitive Firm - repetition Price $ per bushel Firm Price $ per bushel Industry $4 d $4 D 100 200 Output (bushels) 100 Output (millions of bushels) TC‚ TR TR TC QD/G - b k breakeven points
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