Consider a profit-maximizing firm operating in a perfectly competitive industry. If the equilibrium market price of the good falls below the minimum of the firm's average total cost curve but is greater than the minimum of its average variable cost curve, the firm:
Group of answer choices
should increase the price of its product in order to increase profits
should increase the price of its product in order to sell more units of output
should shut down and suffer a loss equal to its total fixed costs
will experience a loss but should continue to operate in the short-run
In: Economics
Quantity | Total fixed cost, TFC (dollars) | Total variable cost, TVC (dollars) |
0 | 500 | 0 |
1 | 500 | 100 |
2 | 500 | 180 |
3 | 500 | 220 |
4 | 500 | 300 |
5 | 500 | 390 |
6 | 500 | 500 |
7 | 500 | 640 |
8 | 500 | 800 |
9 | 500 | 1000 |
10 | 500 | 1250 |
The table above shows some of the costs for a perfectly competitive firm. The firm will produce 9 units of output if the price per unit is
A) $1750.
B) $200.
C) $300.
D) $500.
In: Economics
The following table shows the demand for a product produced by a monopolist , who has a constant marginal cost and an average total cost of $45 per unit
Quantity (Thousand of units) 0 1 2 3 4 5 6
Price (Dollars per unit ) 120 105 90 75 60 45 30
A. Calculate the total revenue and marginal revenue for each level of quantity
B What are the profit-maximizing level of output and the price of the product
C Calculate the monopolist's profit
D Calculate the Lerner Index for this industry
In: Economics
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity | Total Revenue | Total Cost |
0 | $0 | $3 |
1 | $7 | $5 |
2 | $14 | $8 |
3 | $21 | $12 |
4 | $28 | $17 |
5 | $35 | $23 |
6 | $42 | $30 |
7 | $49 | $38 |
A. A competitive firm won’t produce beyond what quantity? Why?
B. What is the marginal cost of the 5th unit?
C. How much should the competitive firm produce to maximize profit?
D. What is the profit at the maximizing quantity?
In: Economics
Toby's current marginal utility from consuming peanuts is 100 utils per ounce and his marginal utility from consuming cashews is 100 utils per ounce. If peanuts cost $.10 per ounce and cashews cost $.25 per ounce, is Toby maximizing his total utility from the kinds of nuts? At the current level of peanut consumption, Toby receive___utils per dollar At the current level of cashews consumption, Toby receives __Utils per dollar Therefore, Toby ----maximizing his total utility because MU plPp is--MUdPc.
In: Economics
Asplund Corporation has provided the following information:
| Cost per Unit | Cost per Period | |
|---|---|---|
| Direct materials | $ 6.25 | |
| Direct labor | $ 2.90 | |
| Variable manufacturing overhead | $ 1.30 | |
| Fixed manufacturing overhead | $ 18,000 | |
| Sales commissions | $ 1.50 | |
| Variable administrative expense | $ 0.45 | |
| Fixed selling and administrative expense | $ 7,500 |
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units?
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units?
In: Accounting
The controller of Blossom Industries has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Electricity Costs Total Machine Hours January $1,720 210 February 2,990 320 March 3,560 500 April 4,800 695 May 3,220 500 June 4,930 770 July 4,040 635 August 3,800 570 September 5,050 660 October 4,350 630 November 3,360 320 December 6,150 790
Determine the fixed- and variable-cost components using regression analysis
In: Accounting
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate [LO2-3]
Mickley Company’s plantwide predetermined overhead rate is $19.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500:
|
Direct materials |
$ |
280 |
|
Direct labor |
$ |
140 |
Required:
1. What is the total manufacturing cost assigned to Job A-500?
2. If Job A-500 consists of 60 units, what is the unit product cost for this job?
In: Accounting
Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate [LO2-3] Mickley Company’s plantwide predetermined overhead rate is $19.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500: Direct materials $ 280 Direct labor $ 140 Required:
1. What is the total manufacturing cost assigned to Job A-500?
2. If Job A-500 consists of 60 units, what is the unit product cost for this job?
In: Accounting
Calculate what you think the share price for company X should be
given the following information and modelling firm value as a
perpetuity with growth: Cash Flow From Operations= 15,500m
Capital Expenditure= 4,600m
Interest Expense= 950m Corporate
Tax= 30% Growth rate = 2% every year
Cash on Balance Sheet = 6,200m
Number of Shares = 5,000m
Total Debt = 8,000m
Total Equity= 90,000m
Cost of Equity re= 9.5%
Cost of Debt rd = 4%
If the share currently costs $12 in the market, what action would
you take?
In: Finance