ECON 1050 Lecture : Economics-1 (1) (dragged) 6

89 views1 pages

salmoneagle674

17 Sep 2016

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

The firm has 4 different plants: 1, 2, 3, or 4 knitting machines. Each plant has a short-run atc curve. The firm can compare the atc for each output at different plants. Atc1, is the atc curve for a plant with 1 knitting machine. (similar with all other three) The long-run average cost curve is made up from the lowest atc for each output level. So, we want to decide which plant has the lowest cost for producing each output level. Let"s find the least-cost way of producing a given output. Suppose that the firm wants to produce 13 sweaters a day. 13 sweaters a day cost . 69 each on atc1. 13 sweaters a day cost . 80each on atc2. 13 sweaters a day cost . 69 each on atc3. 13 sweaters a day cost . 50 each on atc4. The least-cost way of producing 13 sweaters a day is to use 2 knitting machines.

Related Questions

The cost and revenue structures for the only producer of X, Inc., are shown in this table.

Quantity	TVC	TC	TFC	ATC	MC	Price	TR	MR
0	0	15		----	----	20	0	----
1	11				11	17.5
2		32					30
3		36.6				13.5
4	25						48
5		44.5				10.5
6	36					9
7	45.2					8

a. Using the formulas that you are familiar with complete the cost and revenue structure in the table.

b. What are the firm's fixed costs? ______

c. What is the firm's s profit maximizing position? P = _____, Q = _____.

d. At each price level is the demand for product X elastic or inelastic? How do you know?

e. What is the profit or loss at the equilibrium position?

f. Is this firm producing at the lowest possible ATC? At what output level is the minimum point on the ATC?

g. Why is the firm not producing at the cheapest output level?

bluechimpanzee690

A perfectly competitive firm has leased plants and equipment to produce video game cartridges, which can be sold in unlimited quantities at $21 each. The following describe the associated costs of production:

Rate of output / day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248

(a) How much are fixed costs?

Instructions: Enter your responses as a whole number.

$

(b) Compute total revenue for the table below.

Rate of output / day	0	1	2	3	4	5	6	7	8
Total Revenue	$	$	$	$	$	$	$	$	$

Rate of output / day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248
Average Total Cost	---	$	$	$	$	$	$	$	$
Marginal Cost	---	$	$	$	$	$	$	$	$
Demand Curve	$	$	$	$	$	$	$	$	$

(d) What is the profit-maximizing rate of output?

units

(f) What is the size of the loss if production continues?

Instructions: Enter your response as a whole positive number.

$ loss

(g) How much is lost if the firm shuts down?

Instructions: Enter your response as a whole positive number.

$ loss

value:
11.12 points

A perfectly competitive firm has leased plants and equipment to produce video game cartridges, which can be sold in unlimited quantities at $21 each. The following describes the associated costs of production:

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248

(a) How much are fixed costs?

Instructions: Enter your responses as a whole number.

$

(b) Compute total revenue for the table below.

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Revenue	$	$	$	$	$	$	$	$	$

Rate of output/day	0	1	2	3	4	5	6	7	8
Total Cost / day	$50	$55	$62	$75	$96	$125	$162	$203	$248
Average Total Cost	---	$	$	$	$	$	$	$	$
Marginal Cost	---	$	$	$	$	$	$	$	$
Demand Curve	$	$	$	$	$	$	$	$	$

(d) What is the profit-maximizing rate of output?

units

(e) Should the producer stay in business in the short run?

	Yes
	Not enough information
	No

bronzecheetah507

ECON 1050 Lecture : Economics-1 (1) (dragged) 6

Document Summary

Get access

Related Documents

ECON 1050 Chapter 10: Chapter 10.docx

ECON 1050 Chapter 12: Chapter 12.docx

ECON 1050 Lecture Notes - Lecture 20: Monopolistic Competition, Perfect Competition, Product Differentiation

Related Questions