Question
In: Economics
Suppose the market price is $10 (this is also the firm's marginal cost), a firm's quantity...
Suppose the market price is $10 (this is also the firm's marginal cost), a firm's quantity sold is 11, and the average total cost for the firm at that price is $7. What is the firm's profit?
|
$330 |
||
|
$0 |
||
|
$110 |
||
|
$33 |
||
|
The firm would not produce at this quantity because it does not maximize the firm's profit. |
Solutions
Expert Solution
Option D- $33
Market price = $10
Quantity Sold = 11
Total Revenue = Price * Quantity =10 * 11= $110
Average Total Cost = $7
Average Total Cost = Total Cost / Total Quantity Sold
Total Cost = Average Total Cost * Total Quantity Sold
= $7 * 11 = $77
Profit = Total Revenue - Total Cost
= $110 - $77
= $33
Rahul Sunny answered 2 years agoRelated Solutions
Market price is $50. The firm's marginal cost curve is given by MC = 10 +...
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Suppose that a monopoly faces the demand, marginal revenue, and cost schedules below. Quantity Price Marginal...
Suppose that a monopoly faces the demand, marginal revenue, and
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Quantity
Price
Marginal Revenue
Marginal Cost
Average Total Cost
1
230
230
100
150
2
210
190
100
125
3
190
150
100
116.6666667
4
170
110
100
112.5
5
150
70
100
110
6
130
30
100
108.3333333
7
110
-10
100
107.1428571
8
90
-50
100
106.25
9
70
-90
100
105.5555556
10
50
-130
100
105
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multiple choice 1
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marginal revenue and average total cost
b. To determine the firm's profit-maximizing output, the
firm will set its marginal revenue equal to:
multiple choice 2
marginal cost.
average variable cost.
average total cost.
market price.
c. A firm is making an economic profit if, at the
profit-maximizing output, the market price is:
multiple choice 3
less than average total cost....
When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve...
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c. the marginal cost curve determines the quantity of output the firm is willing to supply at any...
Suppose that a competitive firm's marginal cost of producing output q is given by MC(q) =...
Suppose that a competitive firm's marginal cost of producing
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the firm's product is $9.
(a) What level of output will the firm produce?
(b) Suppose that the average variable cost of this firm is given
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to be $3. Will the firm be earning a positive, negative, or zero
profit in the...
In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.
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A certain monopoly has a marginal cost that depends on the quantity produced. The marginal cost...
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The demand curve is: D = 40 - 2Q
Fixed cost of production $10, variable cost is $5 per unit
produced.
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QS = 24 P + 168
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Suppose a firm's marginal product of capital and marginal
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Capital
MP of Capital
Labor
MP of Labor
0
0
1
10
1
28
2
9
2
30
3
8
3
24
4
7
4
20
5
6
5
16
6...
Suppose a firm's marginal product of capital and marginal product of labor schedules are as shown...
Suppose a firm's marginal product of capital and marginal
product of labor schedules are as shown in the table below. The
firm hires both capital and labor competitively for $4 and $8,
respectively. Its output is sold in a competitive market for $.50
per unit.
Capital
MP of Capital
Labor
MP of Labor
0
0
1
10
1
28
2
9
2
30
3
8
3
24
4
7
4
20
5
6
5
16
6
5
6
12
7...
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