Question
In: Economics
Given a perfectly competitive market structure at the profit-maximizing output level, a firm’s total fixed cost...
Given a perfectly competitive market structure at the profit-maximizing output level, a firm’s total fixed cost is $32, total variable cost is $174, marginal revenue is $6.60, and the quantity demanded is 38 units. Calculate the firm's profit at the profit-maximizing output level. Show your work. Show your work.
(Show your work to earn credits. No Work, No Credit.)
Solutions
Expert Solution
At the profit-maximizing output level, the total fixed and variables costs of the firm are $32 and $174 respectively. Therefore, the total cost incurred by the firm at the profit-maximizing level in the market=($32+$174)=$206.
The marginal revenue obtained by the firm by selling each unit of output at the profit-maximizing level is $6.60 and the quantity demanded is given as 38 units. Hence, the total revenue obtained by the firm at the profit-maximizing level=(38 units*$6.60)=$250.8. Thus, the total profit of the firm at the profit-maximizing level=($250.8-$206)=$44.8
Rahul Sunny answered 2 years agoRelated Solutions
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...
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...
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
Figure below shows the cost structure of a firm in a perfectly competitive market. If the market price is $40 and the firm is currently producing the profit maximizing output level, the firm's profit is
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...
For competitive firms, they set marginal cost equal to market price at profit-maximizing level of output....
For competitive firms, they set marginal cost equal to market
price at profit-maximizing level of output.
In the short run, marginal revenue curve faced by a competitive
firm is downward-sloping.
Competitive firms always produce a positive amount of output in
the short run (q > 0).
Competitive firms earn zero economic profit in the long run
equilibrium.
All these are True False Questions
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 =...
At the current level of output, a profit-maximizing firm in a competitive market earns average revenue...
At the current level of output, a profit-maximizing firm in a
competitive market earns average revenue of $25, has an average
total cost of $22 and an average variable cost of $17. If the
firm's marginal cost curve is equal to its average total cost curve
at an output level of 20,000 units, then the firm earns profit of
$60,000 at its current level of output.
True
False
The short-run supply for a firm in a perfectly competitive
market will...
Suppose Bella's Belt Barn operates in a perfectly competitive market and is producing its profit-maximizing level...
Suppose Bella's Belt Barn operates in a perfectly competitive
market and is producing its profit-maximizing level of output.
Suppose further that at this level of production, Bella's average
total cost of producing belts is $22.50, average variable cost is
$21.30, and marginal cost is $21.70. At this moment, Bella is
earning _____ economic profits. Over time, everything else held
constant, the price of belts in this market will _____.
Consider the following cost data for a perfectly competitive firm: Output (Q) Total Fixed Cost (TFC)...
Consider the following cost data for a perfectly competitive
firm:
Output (Q)
Total Fixed Cost (TFC)
Total Variable Cost (TVC)
1
100
120
2
100
200
3
100
290
4
100
430
5
100
590
a. If the market price is $140, how many units of output will
the firm produce in order to maximize profit in the short
run?
b. Find out economic profit or loss at the short-run profit
maximizing output level.
c. What will be the price...
1) At the profit-maximizing level of output, for both a pure monopolist and a purely competitive...
1)
At the profit-maximizing level of output, for both a pure
monopolist and a purely competitive firm, which of the following is
true:
a.
marginal revenue equals average total cost.
b.
marginal revenue equals average variable cost.
c.
marginal revenue equals marginal cost.
d.
average revenue equals average total cost.
2)
Which of the following is not an
example of why markets may not provide
efficient outcomes:
a.
A natural monopoly such as the distribution of electricity to
homes and...
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