The I taco Company is a profit maximizing firm that produced and sells DVD’s in perfectly...

The I taco Company is a profit maximizing firm that produced and sells DVD’s in perfectly competitive product and labor markets. Each DVD sells for $2 and the wage rate is $20 per day. See the short run production table for DVD’s below:

Quantity of Labor	Number of DVD’s per Day
1	20
2	50
3	75
4	90
5	100
6	105
7	108

What is the marginal revenue product of the 2^nd worker?
After which worker hired do diminishing marginal return begin?
What is the marginal product of the 4rth worker?
How many workers will be hired at a wage of $20 a day?
If fixed costs are $30 and 5 labor units are hired, what is the economic profit or loss?
Now assume the rate increases to $30, how many workers will now be hired?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Please draw the graphs to show different profit-maximizing scenarios that a perfectly competitive firm will be...

Please draw the graphs to show different profit-maximizing scenarios that a perfectly competitive firm will be facing with different price levels. Shade the areas of profit or loss to support your arguments A) The Firm is operating and earns a positive profit. B) The Firm is operating and earns 0 profit. C) The Firm is operating but earns negative profit. D) The Firm is indifferent between operating and shutting down. E) The Firm Shuts down.

Consider a profit-maximizing firm operating in a perfectly competitive industry. If the equilibrium market price of...

Consider a profit-maximizing firm operating in a perfectly competitive industry. If the equilibrium market price of the good falls below the minimum of the firm's average total cost curve but is greater than the minimum of its average variable cost curve, the firm: Group of answer choices should increase the price of its product in order to increase profits should increase the price of its product in order to sell more units of output should shut down and suffer a...

A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed...

A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed costs of D $2,250 and total variable costs (TVC) as is below. The firm can only produce integer amounts of output (Q): Q (Output) TVC (Total Variable Cost 0 0.00 1 2,500 2 4,000 3 5,000 4 6,200 5 7,600 6 9,360 7 11,500 8 13,860 9 16,450 10 19,200 11 22,310 3a. How much output should the firm produce if it can sell...

If average variable cost is greater than price, a profit maximizing firm in a perfectly competitive...

If average variable cost is greater than price, a profit maximizing firm in a perfectly competitive market should * continue to produce its current output level. shut down in the short run. increase its output level to minimize its loss. none of the above.

1. The Profit-maximizing Level of output for a perfectly competitive firm in the short run occurs...

1. The Profit-maximizing Level of output for a perfectly competitive firm in the short run occurs where: a. marginal revenue equals price B. Total revenue equals total cost C.marginal cost equals price D. Average revenue equals average total cost 2. Marginal revenue is a firms: A. Ratio of the change in total revenue to change in output. B. Profit per unit times the number of units sold C. Ratio of average revenue to total revenue D. Increase in profit when...

A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed...

A profit-maximizing firm in a perfectly competitive market operates in the short run with total fixed costs of $6,500.00 and total variable costs (TVC) as is below. The firm can only produce integer amounts of output (Q) Q TVC 0 0.00 1 8,000.00 2 15,000.00 3 20,000.00 4 23,000.00 5 25,000.00 6 29,000.00 7 33,500.00 8 39,000.00 9 46,000.00 10 53,500.00 11 61,200.00 12 72,000.00 _______3. (2.5 pts.) How much output should the firm produce if it can sell all...

Describe the profit maximizing position of a perfectly competitive firm in the long-run. Use a diagram...

Describe the profit maximizing position of a perfectly competitive firm in the long-run. Use a diagram to motivate your answer.

How do you determine the profit maximizing (loss minimizing)quantity for the perfectly competitive firm...

- How do you determine the profit maximizing (loss minimizing) quantity for the perfectly competitive firm to produce? - Assume a competitive market has firms earning large economic profits. What is expected to happen over time in this competitive market and to firm's profits? - Why is the demand curve facing a monopolist downward sloping while the demand curve facing a perfect competitor is horizontal? - How can a monopoly maintain its single-seller status?

In a perfectly competitive market, a profit-maximizing firm produces 2000 pounds of butter per week in...

In a perfectly competitive market, a profit-maximizing firm produces 2000 pounds of butter per week in the long run equilibrium. Answer each of the following questions with two diagrams, one for the butter market and another for the individual butter firm. If the market demand for butter increases … a) How does it affect the butter market and the individual butter firm in the short run? b) In the long run, how does the butter market adjust, and what will...

1. Suppose, a perfectly competitive firm is trying to determine its profit-maximizing level of output. The...

1. Suppose, a perfectly competitive firm is trying to determine its profit-maximizing level of output. The product sells for $260 per unit. The total cost function is given by C = 1000 + 80Q – 6Q2 + .2Q3. Find the equilibrium price and maximum profits. Also, find the shutdown point for this firm. 2. You are the manager of a monopolistically competitive firm, and your demand and Cost functions are given by Q = 20 – 2P and C =...

Subjects