A perfectly competitive firm has a total cost function equal to:

C(Q) = 20,000 + 450Q - 4Q² + 0.01Q³

If the market price for the firm is $142 and the firm is producing 220 units, what are their profits/losses?

Refer to the firm above.

What is the minimum market price the firm needs in order to produce in the short-run?

Suppose you are a manager of perfectly competitive firm and at your optimal / profit-maximizing Q, ATC = $20 and AVC = $15. The price in the market is P = $18 and you are producing 400 units of Q (this is your optimal / profit-maximizing level).

What is your profit / loss from producing 400 units?

Suppose you are a manager of perfectly competitive firm and at your optimal / profit-maximizing Q, ATC = $20 and AVC = $15. The price in the market is P = $18 and you are producing 400 units of Q (this is your optimal / profit-maximizing level).

What is your profit / loss if you shut down and produced nothing (Q = 0)?

1.)  Economies of scale refer to

A.) the minimum point on the short-run average total cost curve

B.) the flat portion of the long-run average total cost curve.

C.) a decrease in the long-run average total cost of production as output increases.

D.) a and b

E.) none of the above

.

2.) Minimum efficient scale refers to the

A.) minimum size plant in any given industry

B.) minimum point on the short-run average total cost curve

C.) output level when economies of scale first set in

D.) output level when diseconomies of scale first set in

E.) lowest output level at which average total costs are minimized

.

3.) In long-run competitive equilibrium P = SRATC, because if P > SRATC

A.) losses in the industry would cause some existing firms to exit the industry

B.) positive economic profit would attract firms to the industry in order to obtain the profits

C.) firms would not be producing the quantity of output at which MR = MC

D.) firms would not be covering total fixed costs

E.) none of the above

You are trying to determine the total cost for XYZ's monthly cash collection system. Your firm receives an average of 4000 remittances per month with an average face value of 7500. Total float come to 7 days. 6% is your average opportunity cost and your variable cost is 0.35 per check. What is XYZ's cost for its cash collection system?

Joe's Drones is attempting to minimize total inventory cost and maximize profits this year. Each drone costs Joe $100 to buy and he sells them for $150 each. Joe’s mom helps with the purchasing and ordering and he pays her $100 for every order she places. Joe leases warehouse space from a friend where he can store his inventory and he pays $2.50 per month for each board that he has to store to use this space.

Drones are a hot item and Joe expects to sell 2,500 of them this year. He is currently ordering once a month, but he thinks that he can save money if he optimizes his order quantity.

a) If Joe continues to order once a month this year, what will his Total Annual Cost of Inventory be?

b) Assuming Joe sells everything that he orders, what will his annual profit be if he continues to order once a month

c) What quantity should Joe to order that would minimize Total Cost of Inventory (not Total Cost - the is Inventory only)?

d) How much will Joe’s annual profit change if he orders based on the EOQ rather than ordering once a month?

1. The table below contains price-demand and total cost data for the production of projectors, where p is the wholesale price (in dollars) of a projector for an annual demand of x projectors and C is the total cost (in dollars) of producing x projectors.

Price-Demand:

a. Make a scatter plot for p vs x (price-demand plot).

b. Get a regression line that best fits the data in Question a. You need to type the equation of this line in desmos and graph it with your scatter plot. Please use p(?1) = equation when typing in desmos.

c. Does it look like the regression line models the data well? (Yes or No) Why?

d. Use the equation typed in desmos to find p(0), p(3000), p(6000) 5. What value of x would make p(x) = 0?

5NCCA:

Many believe that cloud computing can reduce the total cost of computing and enhance “green computing” (environmental friendly). Why do you believe this to be correct? If you disagree, please explain why?

9. Younger Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109 and its total fixed cost is $658,416.

Required:

For the activity level of 8,800 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range.

10. Match the following terms to the appropriate statement by placing the letter to the left of each statement.

a.Committed fixed cost b. Fixed Cost c. Variable Cost d. Total Cost e. Discretionary Fixed Cost f. High-low method g. Mixed Cost h. Relevant Range i. Scattergraph j. Step cost

1. Cost that does not change in total as long as production is in the relevant range.

2. Fixed costs that cannot be changed over the short run.

3. Cost that changes in total as production changes but remains unchanged per unit.

4. The sum of fixed costs and variable costs

5. The normal level of operating activity.

6. Fixed costs that can be changed over the short run.

7. A cost that has both a fixed and variable component.

8. A cost that is fixed over only a small range of activity.

9. A graph that shows total costs in relation to volume, or activity level.

10. A method of estimating the fixed and variable cost components of a mixed cost that requires using only two data points, the lowest point of activity and the highest point of activity.

11. Indicate which of the following costs are classified as mixed or step costs.

12. Vest Construction Company’s cost of renting a crane for the last four months is as follows:

Using the high-low method, what is the company’s estimated variable and fixed component of operating expenses? What is the total cost equation? What would be the estimated total cost if a crane is rented for 60 hours per month?

Find the missing values for each company

The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $4,000,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $505,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $560,000 at the end of Year 11.