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A firm is currently producing 80 units of output. At this level of output produced, P = 150 and ATC = 120. Also, assume that MC = 130 and MR is constant at all output levels and equal to 150.

a. Is this firm making profits? If so, what are these profits?

b. Is this firm maximizing profits? If not, what would you recommend this firm do to maximize profits? Why?

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Related questions

NUMBER 3.

You have the follwoing information for a firm:

TR = 200 Q – Q2 MR = 200 – 2 Q

TC = 1000 - 8 Q + Q2 MC = - 8 + 2 Q

a. If the firm produces 60 units of output, what are profits or losses for this firm.

b. Is the firm maximizing profits producing Q = 60? If not, what is the profit maximizing

level of output produced?

c. What are maximum profits?

NUMBER 4.

A firm is currently producing 80 units of output. At this level of output produced, P = 150 and ATC = 120. Also asume that MC = 130 and MR is constant at all output levels and equal to 150.

a. Is this firm making profits? If so, what are these profits?

b. Is this firm maximizing profits? If not, what would you recommend this firm do to

maximize profits? Why?

NUMBER 1.

a. A firm is currently producing 40 units of output. At this level of ouput produced:

. Its average total cost is 130 (ATC = 130)

. The price per unit of output is 150

. MR = 30

. MC = 50

i. Is this firm making profits or losses? How much?

ii. Are they máximum profits? Why?

iii. If your answer to part ii. was no, what does this firm have to do to maximize its profits?

NUMBER 2.

A firm’s total cost and marginal cost functions are

TC = 10 Q2 + 2 Q – 2 ; MC = 20 Q + 2.

Asuming that the market price is 42 and that the marginal revenue (MR) is also 42 (it is constant at all output levels), how much output will this firm sell (produce) to maximize profits?

A firm is currently producing 40 units of output. At this level of output produced:

average total cost is $130; the price per unit of output is $150; MR is $30; MC is $50.

A. Is this firm making profits or losses? How much?

B. Are they ma¡ximum profits? Why?

C. If your answer to question B was no, what does this firm have to do to maximize its profits?

 

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