A firm's total cost of producing Q units of output is C (Q) = 79 + 20Q. The inverse demand curve for the firm's product is P(Q) = 100-Q, where P denotes the price of the product.
a) If the price of the product is set equal to the firm's marginal cost, what profit will the firm earn?
b) If the firm charges a two-part tariff (a fixed fee plus a per unit price), how large is the fixed fee? How large is the deadweight loss?
In: Economics
The following are the transactions for the month of July.
| Units | Unit Cost | Unit Selling Price | ||||||||
| July 1 | Beginning Inventory | 53 | $ | 10 | ||||||
| July 13 | Purchase | 265 | 13 | |||||||
| July 25 | Sold | (100 | ) | $ | 15 | |||||
| July 31 | Ending Inventory | 218 | ||||||||
Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under FIFO. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.)
In: Accounting
The following are the transactions for the month of July. Units Unit Cost Unit Selling Price July 1 Beginning Inventory 53 $ 10 July 13 Purchase 265 13 July 25 Sold (100 ) $ 15 July 31 Ending Inventory 218 Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under LIFO. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.)
In: Accounting
Grippers expects cost of goods sold to average 65% of the current month’s sales and the company expects to sell 4,300 pairs of shoes in March for $240 each. Grippers’ target ending inventory is $10,000 plus 50% of the next month’s cost of goods sold.
Use this information plus the sales budget from Question 1 to prepare Grippers’ inventory, purchases, and cost of goods sold budget for January and February.
Sales budget from question 1:
Particulars:
Cash Sales in January = 185,000.00
Cash sales in February = 192,500.00
Total = 377,500.00
Credit sales in January = 5,55,000.00
Credit sales in February = 5,77,500.00
Total credit sales = 11,32,500.00
Total Sales in January = 7,40,000.00
Total sales in February = 7,70,000.00
Total = 15,10,000.00
In addition, indicate what the total cost of goods sold will be for the 2 months.
1. cost of goods sold for January is:
2. Cost of goods sold for February is:
3. Total cost of goods sold for the 2 month is:
4. Desired ending inventory for January is:
5. Desired ending inventory for february is:
6. Beginning inventory for January is:
7. Beginning Inventory for February is:
8. Purchases for January are:
9. Purchases for february are:
In: Accounting
Jefferson Company has sales of $320,000 and cost of goods available for sale of $272,100. If the gross profit ratio is typically 30%, the estimated cost of the ending inventory under the gross profit method would be:
$96,200
$48,100
$176,100
$47,900
$96,000
In: Accounting
Consider the following cost information for a firm that operates in a perfectly competitive market. Labor is a variable input.
|
Q (quantity of output) |
Total cost ($) |
|
0 |
15 |
|
1 |
25 |
|
2 |
45 |
|
3 |
75 |
|
4 |
110 |
|
5 |
165 |
|
6 |
225 |
(1) As the firm increase the output from 1 unit to 2 units, does the marginal product of labor rise or fall? Explain.
(2) Suppose that the market price is $30. Find the optimal quantity of output that the firm should produce in the short run.
(3) Suppose that the market price drops from $30 to $20. Find the quantity of output that the firm should produce in the short run.
In: Economics
Based on the table below, what was the profit of the firm?
| Quantity | ||
| Total Fixed Cost | $234,000 | |
| Total Variable Cost | ||
| Total Cost | ||
| Average Fixed Cost | ||
| Average Variable Cost | $62 | |
| Average Total Cost | $98 | |
| Marginal Cost | $177 | |
| Price | $155 | |
| Marginal Revenue | $79 | |
| Total Profit (loss) | ||
In: Economics
A firm's total cost of producing Q units of output is C (Q) =
200 + 50Q. The inverse demand curve for the firm's product is P(Q)
= 80-Q, where P denotes the price of the product.
a) If the price of the product is set equal to the firm's average,
how much will the firm produce? (5 points) Hint: choose the larger
of the two numbers. Show your work.
b) If the firm is under marginal cost pricing, how many units will
the firm produce? Show your work. (5 points)
In: Economics
The table below contains economic cost information for a
perfect competitor. Use it to answer the questions that follow. Q,
ATC, AVC, and MC = quantity, average total cost, average variable
cost, and marginal cost.
Q | ATC | AVC | MC |
10 | 100.00 | 80.00 | 10 |
11 | 95.45 | 77.27 | 50 |
12 | 93.33 | 76.67 | 70 |
13 | 92.31 | 76.92 | 80 |
14 | 91.79 | 77.50 | 85 |
15 | 91.67 | 78.33 | 90 |
16 | 91.88 | 79.38 | 95 |
17 | 92.35 | 80.59 | 100 |
18 | 93.06 | 81.94 | 105 |
19 | 93.95 | 83.42 | 110 |
20 | 95.25 | 85.25 | 120 |
What quantity maximizes profit when price = $101?
Q = __
What is the maximum profit when price = $101?
Maximum profit = ___
Would the maximum profit increase, decrease, or remain constant
in the long run?
The maximum profit would ____________________.
Why?
Would the firm produce output or shut down in the short run when
price = $84?
The firm would ________________________.
Explain your logic.
In: Economics
A monopolistic competitor produces 100 units of a good at a per-unit cost of $22. If it charges a price of $19 per unit of the good, it will ________.
A. earn zero economic profits in the short run
B. incur a loss of $300 in the short run
C. earn a profit of $1,900 in the short run
D. incur a loss of $100 in the short run
A monopolistically competitive firm makes positive economic profits if ________.
A. price is less than average total cost
B. price is higher than average total cost
C. price equals marginal cost
D. price equals average fixed cost
A monopolistic competitor earns zero economic profits if ________.
A. price is higher than average total cost
B. price is lower than marginal cost
C. price is equal to marginal cost
D. price is equal to average total cost
A monopolistic competitor incurs losses if ________.
A. price is higher than average total cost
B. price is lower than marginal cost
C. price is equal to marginal cost
D. price is lower than average total cost
Firm A charges $8.50 for each unit of Good X. If the average total cost of producing 1,000 units of Good X is $12 and the market for Good X is monopolistically competitive, Firm A ________ by producing 1,000 units of Good X.
A. earns a profit of $3,500
B. earns a profit of $1,000
C. incurs a loss of $1,000
D. incurs a loss of $3,500
Suppose a monopolistic competitor produces 2,000 units of the good in equilibrium and charges a price of $10 for each unit. If the average total cost of producing 2,000 units of the good is $6, what is the total profit earned by the producer?
A. $8,000
B. $4,000
C. $2,000
D. $20,000
In: Economics