A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product: Q = 200 ; MR = 100-Q ; TC = 5Q ; MC = 5

a) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output?

b) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price?

c) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?

True/false. In the long-run, if price is above average fixed cost but below average total cost a firm should stay in the market.

True/false. Total cost divided by output is marginal cost.

True/false. In the long-run, firms in a competitive market earn zero profit and the market price is set such that each individual firms' average total cost is minimized.

True/false. The average fixed cost curve never increases as quantity increases.

True/false. The marginal cost curve passes through the minimum point of the AVC and ATC curves.

True/false. The money spent on four acres of land is an example of a fixed cost, whereas money spent on renting a warehouse is a variable cost.

Marginal cost, MC, and average total cost, ATC, become equal when MC is at its minimum point. True or False

A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve for its product: Q = 200 - 2P ; MR = 100 - Q ; TC = 5Q ; MC = 5

a) What level of output maximizes total revenue?. b) What is the profit maximizing level of output?. c) What is the profit maximizing price?. d) How much profit does the monopolist earn? e) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output? f) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price? g) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?

Willis Products Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,000 units of medical tablets are as follows:

Willis Products desires a profit equal to a 20% rate of return on invested assets of $319,600.

a. Determine the amount of desired profit from the production and sale of 4,000 units.
$

b. Determine the total costs for the production of 4,000 units.

Determine the cost amount per unit for the production and sale of 4,000 units.
$ per unit

c. Determine the total cost markup percentage per unit. (rounded to one decimal place).
%

d. Determine the selling price per unit. Round to the nearest cent.
$ per unit

1. What is the relationship between marginal cost (MC) and average total cost (ATC)?

2. What is the difference between positive and normative statements? Which do economists generally consider the more persuasive statement type, and why?

3. What are the conditions needed for the Supply and Demand model to hold?

4. What is the difference between Quantity Demanded (Q_D) and Demand (D)?

1.)

The table below represents the costs of producing jackets.

Find the average variable cost for producing 42 jackets. Round your answer to the nearest hundredth.

2.) The table below represents the costs of producing sneakers.

Find the average fixed cost for producing 34 sneakers. Round your answer to the nearest hundredth

Consider the following cost data for a perfectly competitive firm:

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 and quantity in the long run equilibrium?

Use illustration where possible