At 110 units of output, marginal revenue is $6, the marginal cost is $6, and the...

At 110 units of output, marginal revenue is $6, the marginal cost is $6, and the average cost is $5. If consumers demand 110 units of output when the price is $9, what is the expected profit?

Expert Solution

Solution:

Profit = total revenue - total cost

Also, total revenue = price*output ; total cost = average cost*output

So, profit = price*output - average cost*output

Profit = (price - average cost)*output

Then, given the information, at 110 units of output, expected profit = (9 - 5)*110 = 4*110 = $440

(Note that at 110 units of output, marginal revenue = marginal cost (= $6) indicating a profit maximizing level for the firm).

Rahul Sunny answered 2 years ago

Suppose that at 500 units of output, the marginal revenue is equal to marginal cost. The...

Suppose that at 500 units of output, the marginal revenue is equal to marginal cost. The firm is selling its output at $10 per unit and average total cost at 500 units of output is $6. On the basis of this information, we: can say that the firm should close down in the short run. can assume the firm is not using the most efficient technology. can say that the firm can produce and realize an economic profit in the...

Question 1 Output total cost marginal cost fixed cost average cost Total revenue average revenue Marginal...

Question 1 Output total cost marginal cost fixed cost average cost Total revenue average revenue Marginal revenue 0 10 0 1 16 20 2 26 40 3 40 60 4 60 80 5 88 100 6 120 120 A) Complete the missing data on the table B) What is the selling price of a laptop case explain your answer c) What is the profit maximizing level of output for this firm explain your answer d) create a graph using three...

A company produces at an output level where marginal cost is equal to marginal revenue and...

A company produces at an output level where marginal cost is equal to marginal revenue and has the following revenue and cost levels: Total revenue = $1,450 Total cost = $1,500 Total variable cost = $1,300 What would you suggest? shut down continue to produce because the loss is less than the total fixed cost increase production to lower the marginal cost reduce output to lower the marginal cost raise the price

1.If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue,...

1.If the firm is producing at a quantity of output where marginal cost exceeds marginal revenue, then ________. (there can be multiple answers.) A)the firm should reduce production B)each marginal unit adds profit by bringing in more revenue than its cost C)the firm's perceived demand will shift to the left D)the excess profit would attract additional competition 2.In what way(s) is a monopolistically competitive firm inefficient?(there can be multiple answers.) A) It does not produce at the minimum of its...

why is the level of output at which marginal revenue equals marginal cost the profit maximizing...

why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing...

Why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

Assume that price equals a rising marginal cost at 50 units of output. At this output,...

Assume that price equals a rising marginal cost at 50 units of output. At this output, total variable cost is $250 and total fixed cost is $300. The product’s price is $6. a. The perfectly competitive firm will maximize profit by producing ______ units of output. b. If this firm shuts down, it will lose ______ dollars.

At a quantity of 265 units marginal revenue equals marginal cost. Fixed cost is $2,500, the Total Variable cost is $9,500, and the total revenue is $11,000.

At a quantity of 265 units marginal revenue equals marginal cost. Fixed cost is $2,500, the Total Variable cost is $9,500, and the total revenue is $11,000. Calculate the average fixed cost, average variable cost, average total cost and marginal revenue. Should the company shut down or stay in business in the short run? In the long run?

At a quantity of 375 units marginal revenue equals marginal cost. Fixed cost is $1000, the Total Variable Cost is $7,000 and the Total Revenue is $6000.

At a quantity of 375 units marginal revenue equals marginal cost. Fixed cost is $1000, the Total Variable Cost is $7,000 and the Total Revenue is $6000. Calculate the average fixed cost, average variable cost, average total cost and marginal revenue. Should the company shut down or stay in business?

1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost....

1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost. It is earning A. a positive economic profit. B. an economic loss. C. a normal profit. D,There is not enough information to answer the question. 2. A perfectly competitive firm will always maximize short-run profits by producing the level of output where the average total cost is minimized. A.True B.False

Question