Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly.

Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

This time your firm was only able to give you information about your total cost. That information is given below: T C = 128 + 8Q + 2Q 2

(a) Find the marginal cost and the average cost.

(b) Calculate the optimal cost-minimizing quantity

1. Assume the following: sales price is $9, output is 5,000 units, average total cost is $15, marginal cost is $9, and average variable cost is $7.50. What should the firm do and why?

A. Shut down, because average total cost is greater than price

B. Shut down, because of a loss of $5,000

C. Continue to produce, because price is greater than average variable cost

D. Continue to produce, because price is greater than average total cost

2.The price charged by a firm in the perfectly competitive market is set by the __________.

A. market

B. government

C. consumers acting in unison

D. firm itself

3. Any firm that cannot cover its variable costs should __________ in the short run and __________in the long run.

A. decrease output; decrease output

B. decrease output; leave the industry

C. shut down; decrease output

D. shut down; leave the industry

4. Which of the following markets is closest to perfect competition?

A. The market for rough diamonds, where DeBeers controls the bulk of production.

B. The craft beer market, where there are thousands of small local producers each selling their own specialized brand.

C. The potato market, where many producers grow similar produce, frequently in Idaho.

D. The local water provider, where there are many similar providers throughout the country

If the price was slightly less than average total cost, but still greater than average variable cost, then the profit-maximizing, monopolistically competitive firm would

Answer choices:

produce an output amount that corresponded to the place where marginal cost equals marginal revenue and break even.

produce an output amount where marginal cost equals marginal revenue and make a small profit.

continue to produce an output amount that corresponded to the place where marginal cost equals marginal revenue, but make a small loss.

produce an output amount that corresponded to the place where average total cost equals average variable cost and incur a small loss.

shut down to minimize losses in the short run.

Suppose a firm operating under perfect competition in the short run has the following total cost function;

C = 125 + q^2

If price equals $30;

a. What is the profit maximizing level of output q? (Hint: P = MC)

b. Should the firm shut down or continue to produce? Explain in detail.

c. Is the firm making a profit, loss, or breaking even?

Humphries Company reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 200 $5 $1 000 12 Purchase 300 6 1 800 23 Purchase 500 7 3 500 30 Inventory 160 Instructions Assume a sale of 400 units occurred on 15 June for a selling price of $8 and a sale of 440 units on 27 June for $9. Assume that a perpetual inventory system is used. Using FIFO, calculate: (a) the cost of the ending inventory $ (b) the cost of sales $ Using LIFO, calculate: (c) the cost of the ending inventory $ (d) the cost of sales $ Using MOVING-AVERAGE COST, calculate: (round your answer to the nearest dollar)* (e) the cost of the ending inventory $ (f) the cost of sales $ * In your computation, round average per unit cost to the nearest tenth of a cent (three digits after the decimal)