Question
In: Economics
The monopolist: "You Can't Handle the Ruth" sells baseball cards. It has a fixed cost of...
The monopolist: "You Can't Handle the Ruth" sells baseball cards. It has a fixed cost of $5000 in rent, and a variable cost of
2Q. Q is t he number of baseball cars which are sold. The firm faces a market demand curve of P=200-Q.
What is the firms profits maximizing equilibrium?
How much profits is the firm making?
Should it stay open or shut down?
Solutions
Expert Solution
Demand Function
P = 200 - Q
Profit is maximized where marginal revenue and marginal cost both are equal
Marginal revenue can be calculated from the demand curve by doubling the coefficient of Q
MR = 200 - 2Q
Total Cost Function
TC = 5000 + 2Q
Marginal cost can be calculated from the total cost function by differentiation.
MC = dTC / dQ
MC = 2
Equating MR and MC
200 - 2Q = 2
Q = 99
Hence the equilibrium quantity is 99 units
To find the equilibrium price we will use this quantity in demand function.
P = 200 - Q
P = 200 - (99)
P = 101
Profit = Total Revenue - Total Cost
Total Revenue = Price x Quantity
Total Revenue = 101 x 99
Total Revenue = 9999
Total Cost = 5000 + 2Q
Total Cost = 5000 + 2(99)
Total Cost = 5198
Profit = Total Revenue - Total Cost
Profit = 9999 - 5198
Profit = 4801
A firm should shut down when it is not able to cover its average variable cost from price so at 99 units price is $101 and
AVC = VC / Q
AVC = 2Q / Q
AVC = 2(99) / 99
AVC = 2
As price is greater than AVC hence the should continue to produce and should not shut down.
Rahul Sunny answered 1 year agoRelated Solutions
he monopolist: "You Can't Handle the Ruth" sells baseball cards. It has a fixed cost of...
he monopolist: "You Can't Handle the Ruth" sells baseball
cards. It has a fixed cost of $5000 in rent, and a variable cost of
2?. Q is t he number of baseball cars wehich are sold. The firm
faces a market demand curve of P=200-Q.
What is the firms profits maximizing equilibrium?
How much profits is the firm making?
Should it stay open or shut down?
A company that sells baseball cards claims that 40% of the cards are rookies, 50% are...
A company that sells baseball cards claims that 40% of the cards
are rookies, 50% are veterans, and 10% are all stars. Suppose a
random sample of 100 cards has 55 rookies, 40 veterans, and 5
all-stars.
Card Type
Observed Frequency O
Expected Frequency E
O-E
(O-E)2
(O-E)2
E
Rookie
Veteran
All-Star
Test the company's claim using a 0.01 level of significance. You
may use the empty columns of the table above to assist you.
a) State the null and...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
A monopolist meets the demand curve P = 200-8Q. The company has a fixed cost of...
A monopolist meets the demand curve P = 200-8Q. The company has
a fixed cost of 200 and a marginal cost of MC = 40. This means that
the total cost is TC = 200 + 40Q. How big is the monopoly
gain?
I repeat if you dont know the answer dont even bother idiots.
BallCards Inc. sells baseball cards in packs of 15 in drugstores and convenience stores throughout the...
BallCards Inc. sells baseball cards in packs of 15 in drugstores
and convenience stores throughout the country. It is the third
leading firm in the industry. BallCards has been approached by
Pennock Cereal Inc., which would like to order a special edition of
cards to use as a promotion with its cereal. BallCards would be
solely responsible for designing and producing the cards. Pennock
wants to order 25,000 sets and has offered $23,750 for the order.
Each set will consist...
6. Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed...
6.
Dragon Sports Inc. manufactures and sells two products, baseball
bats and baseball gloves. The fixed costs are $377,400, and the
sales mix is 20% bats and 80% gloves. The unit selling price and
the unit variable cost for each product are as follows:
Products
Unit Selling Price
Unit Variable Cost
Bats
$40
$30
Gloves
100
60
a. Compute the break-even sales (units) for
both products combined.
units
b. How many units of each product, baseball
bats and baseball gloves,...
A monopolist produces gizmos at constant marginal cost of 4 and no fixed cost. It recognizes...
A monopolist produces gizmos at constant marginal cost of 4 and
no fixed cost. It recognizes that it has two types of customers.
The demand curve of each type of customer is given by: Type-1
customer: ( ) p1 q1 = 18 − 2q1 Type-2 customer: ( ) p2 q2 =15 − q2
where qi (i = 1, 2) are the quantity demanded of type i consumer
per period. While the monopolist knows the demand curves, it cannot
identify the...
A monopolist sells in two adjacent countriesand has a constant marginal cost of 20. The demand...
A monopolist sells in two adjacent countriesand has a constant
marginal cost of 20. The demand in country 1 is Q1= 90 –P1, and the
demand in country 2 is Q2= 150 –P2. Resale is not prohibited so the
monopolist must deal with the two countries as one market.a. What
is the equilibrium quantity, price,and profit?b. What is the price
elasticity at the equilibrium price?c. Suppose resale is now
prohibited so the monopolist can now practice price discrimination.
What is...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- PUT IN JAVA PROGRAMMING LANGUAGE The Rectangle class: Design a class named Rectangle to represent a...
- Journal article summary on inter-group conflict Peer Reviewed Journal article from past 3 years. Please include...
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
ADVERTISEMENT