Question

In: Economics

A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete...

A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete the table below to answer the following questions.

Quantity of output (liter)

Total revenue

Marginal revenue

Total cost

Marginal cost

ATC

VC

AVC

0

3

1

5

2

8

3

12

4

17

5

23

6

30

7

38

8

47

a) Find the quantity of output that maximizes the profit for the firm. Also calculate the profit at that level.

b) Find out the break-even quantity for the firm.

c) Find out the shutdown point for the firm.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete...
A dairy farm faces a perfectly competitive market. It sells milk at $6 per liter. Complete the table below to answer the following questions. Quantity of output (liter) Total revenue Marginal revenue Total cost Marginal cost ATC VC AVC 0 3 1 5 2 8 3 12 4 17 5 23 6 30 7 38 8 47 a) Find the quantity of output that maximizes the profit for the firm. Also calculate the profit at that level. b) Find out...
Marvin’s Milk Farm produces milk and sells it in a perfectly competitive market at $3 per...
Marvin’s Milk Farm produces milk and sells it in a perfectly competitive market at $3 per bottle. The following table shows Marvin's weekly total and marginal product schedules, using labor and capital. Assume that labor and capital may be used independently; that is, one is not needed for the other factor to be productive. Therefore, the total amount of milk that Marvin's produces is obtained by adding together the amount of milk produced by labor and the amount of milk...
Suppose that a perfectly competitive firm faces a market price of ​$5 per​ unit, and at...
Suppose that a perfectly competitive firm faces a market price of ​$5 per​ unit, and at this price, the​ upward-sloping portion of the​ firm's marginal cost curve crosses its marginal revenue curve at an output level of 1,500 units. If the firm produces 1,500 ​units, its average variable costs equal ​$5.50 per​ unit, and its average fixed costs equal ​$0.50 per unit.  What is the​ firm's profit-maximizing​ (or loss-minimizing) output​ level? nothing. ​(Enter your response as a whole number long dash—...
6. If a market is perfectly competitive, then:
Perfect CompetitionWork Sheet #96. If a market is perfectly competitive, then:     a. the market demand curve for the product is horizontal.     b. the demand curve facing each individual seller is downward sloping.     c. the   demand curve facing sellers as a group and each individual seller is horizontal.     d. the demand curve facing an individual seller is horizontal.7. Which of the following is characteristic of a purely competitive seller's (price taker's) demandcurve?     a. It is the same as the market demand...
A firm is operating in the perfectly competitive market for gummy bears. It faces the following...
A firm is operating in the perfectly competitive market for gummy bears. It faces the following conditions: TC(q)=4+ (q2/16 ) MC(q)=q/8 Market Demand: D(P)=1008-200P Please answer the following questions. Suppose market price is currently at $2. a) What is the profit maximizing quantity for the firm to produce at? b) What is the profit for the firm at the profit maximizing quantity? c) If all firms are identical to this firm, how many firms must there be in the market?...
1.​Winthrop Dairy Farms Ltd. is an Ontario corporation. The farm owns dairy cows that produce milk....
1.​Winthrop Dairy Farms Ltd. is an Ontario corporation. The farm owns dairy cows that produce milk. ​a) Describe the accounting treatment and measurement value of the dairy cows assuming the farm uses IFRS.​ ​b) Describe the accounting treatment and measurement value of the milk assuming the farm uses IFRS.​ c) Assume the farm uses IFRS and the fair value of a dairy cow increased from the 2017 year-end to the 2018 year-end. How would you record this increase in 2018?​...
Assume that a particular fruit is bought and sold in a perfectly competitive market. Each farm...
Assume that a particular fruit is bought and sold in a perfectly competitive market. Each farm is 1 acre in size and there are 120 acres on which this fruit is grown. On 80 of the lots, the AC = MC = $10 and each acre lot can produce a maximum of 20 units of fruit each year. On the other 40 acres AC = MC =25 and each acre lot can produce a maximum of 5 units of fruit...
Assume that a particular fruit is bought and sold in a perfectly competitive market. Each farm...
Assume that a particular fruit is bought and sold in a perfectly competitive market. Each farm is 1 acre in size and there are 120 acres on which this fruit is grown. On 80 of the lots, the AC = MC = $10 and each acre lot can produce a maximum of 20 units of fruit each year. On the other 40 acres AC = MC =25 and each acre lot can produce a maximum of 5 units of fruit...
A perfectly competitive firm faces a market-determined price of $25 for its product.
A perfectly competitive firm faces a market-determined price of $25 for its product.(1) (2) (3) (4) (5) (6) (7)QuantityTotal costAverage total costMarginal costMarginal revenueProfit margin0 1000 100 2000 200 3300 300 4800 400 7000 500 9600a. The firm’s total costs are given in the schedule above. Fill in columns 3 and 4 for average total cost and marginal cost. b. Fill in columns 5 and 6 for marginal revenue and profit margin. c. How much output should the competitive firm...
A firm sells a product in a perfectly competitive market, at a price of $50. The...
A firm sells a product in a perfectly competitive market, at a price of $50. The firm has a fixed cost of $30. Fill in the following table and indicate the level of output that maximizes profit. How would the profit-maximizing choice of output change if the fixed cost increased from $40 to $60? More generally, explain how the level of fixed cost affects the choice of output Output Total Revenue Total Cost Profit Marginal Revenue Marginal Cost 0 1...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT