Question
In: Economics
The table below shows the costs of a firm that produces handmade pottery vases in a...
The table below shows the costs of a firm that produces handmade
pottery vases in a competitive industry.
| Output | AVC | MC |
| 1 | 3 | 3 |
| 2 | 2.50 | 2 |
| 3 | 2.17 | 1.5 |
| 4 | 1.93 | 1.2 |
| 5 | 1.74 | 1 |
| 6 | 1.67 | 1.3 |
| 7 | 1.71 | 2 |
| 8 | 2 | 4 |
| 9 | 2.44 | 6 |
| 10 | 3 | 8 |
The market price for a handmade vase is $4.50. To maximize its
profit, this firm should produce vases.
Solutions
Expert Solution
If there is no output at which price equals the marginal cost in explicit manner then it produce up to that level of output at which price exceeds
the marginal cost. The market price is $4.50 per vase. The given table shows that the market price exceeds the marginal cost up to production of 8 vases.
So,To maximize its profit, this firm should produce 8 vases.
Rahul Sunny answered 2 years agoRelated Solutions
Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses...
Parker Pottery produces a line of vases and a line of ceramic
figurines. Each line uses the same equipment and labor; hence,
there are no traceable fixed costs. Common fixed cost equals
$30,000. Parker's accountant has begun to assess the profitability
of the two lines and has gathered the following data for last
year:
Vases
Figurines
Price
$40
$70
Variable cost
30
42
Contribution margin
$10
$28
Number of units
1,000
500
Required:
1. Compute the number of vases and...
Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each...
Multiple-Product Breakeven
Parker Pottery produces a line of vases and a line of ceramic
figurines. Each line uses the same equipment and labor; hence,
there are no traceable fixed costs. Common fixed cost equals
$40,000. Parker's accountant has begun to assess the profitability
of the two lines and has gathered the following data for last
year:
Vases
Figurines
Price
$40
$70
Variable cost
30
42
Contribution margin
$10
$28
Number of units
1,000
500
Required:
If required, round your final...
Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each...
Multiple-Product Breakeven
Parker Pottery produces a line of vases and a line of ceramic
figurines. Each line uses the same equipment and labor; hence,
there are no traceable fixed costs. Common fixed cost equals
$30,000. Parker's accountant has begun to assess the profitability
of the two lines and has gathered the following data for last
year:
Vases
Figurines
Price
$40
$70
Variable cost
30
42
Contribution margin
$10
$28
Number of units
1,000
500
Required:
1. Compute the number of...
Multiple-Product Breakeven Parker Pottery produces a line of vases and a line of ceramic figurines. Each...
Multiple-Product Breakeven
Parker Pottery produces a line of vases and a line of ceramic
figurines. Each line uses the same equipment and labor; hence,
there are no traceable fixed costs. Common fixed cost equals
$38,400. Parker's accountant has begun to assess the profitability
of the two lines and has gathered the following data for last
year:
Vases
Figurines
Price
$40
$70
Variable cost
30
42
Contribution margin
$10
$28
Number of units
1,000
500
Required:
If required, round your final...
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cigarette firms have evidence that indicates that cigarette smoke
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Q3: a) The following table shows some costs of a typical firm that operates in a...
Q3: a) The following table shows some costs of a typical firm
that operates in a perfectly competitive industry where the market
price (P*) is $20 per unit. Complete the following table. Show
values to 2 decimal places if they are not whole numbers.
Hint: Start with the first row.
Q
(units)
TFC
TVC
TC
AFC
AVC
ATC
MC
TR
AR
MR
0
$60
–
–
–
–
–
–
1
$15
2
$12.50
3
$31
4
$44
5
$11.80...
Problem 3 Table 1 below shows an incomplete table of costs for a company. Use the...
Problem 3
Table 1 below shows an incomplete table of costs for a
company.
Use the definitions of these costs and how they are related to
complete the missing cells of this table. For each cell you fill
in, explain how you are able to determine the value of that
cost.
Table 1 – Costs
Output (Q)
Fixed Cost (FC)
Variable Cost (VC)
Total Cost (TC)
Average Fixed Cost (AFC)
Average Variable Cost (AVC)
Average Total Cost (ATC)
Marginal Cost...
The table below shows the average cost of a firm depending on the level of production....
The table below shows the average cost of a firm depending on
the level of production.
Q
0
1
2
3
4
5
6
AC
--
32
24
20
24
25
26
Assuming that the company is operating in the long run what are
fixed costs?
The following table shows the costs that a firm faces in a perfect competitive market: Output...
The following table shows the costs that a firm faces in a
perfect competitive market:
Output
Fixed Cost
Variable Cost
Total Cost
Average Total Cost
Marginal Cost
0
0
1
40
2
100
3
170
4
250
5
360
6
580
7
920
a. Taking into account that the firm has
a fixed cost of $200, complete the table. (20 points)
b. If the market price is $340, what is
the level of output that the firm should produce in order to...
The following table shows ceremonial ranking and type of pottery sherd for a random sample of...
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Ceremonial Ranking
Cooking Jar
Sherds
Decorated Jar Sherds
(Noncooking)
Row
Total
A
86
49
135
B
97
48
145
C
82
72
154
Column
Total
265
169
434
Use a chi-square test to determine if ceremonial ranking and
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(a) What is the level of significance?
State the null...
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