ECON 2030 Chapter : Econ Lab October 15 17

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azuremammoth471

15 Mar 2019

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Market and is producing its profit-maximizing level of output. At this moment in time, the price of a kilo of natalie"s: suppose natalie"s gummib r boutique operates in a perfectly competitive. 10/15/14 market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average total cost of producing a kilo of gummi bears is . 50, average variable cost is . 00, and marginal revenue is . 25. At this moment in time, natalie is earning an economic profit _____ zero. less than: suppose michelle"s mitten mill operates in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average total cost of producing mittens is , average variable cost is , and marginal cost is . Over time, everything else held constant, the number of sellers in this market will.

Related Questions

Suppose, at a given point in time, Sally's smoothie shack operates in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average variable cost of producing a smoothie is $2.90, the average total cost is $4.00, and the marginal cost is $3.60. At her current level of production, what is.. a. Sally's average fixed cost of producing a smoothie? b. Sally's marginal revenue from selling a smoothie? c. The price of the smoothie? d. Sally's profit from selling smoothies? **please explain how you got the answer!

blushsea-lion940

Question:

Evaluate the following statement:

In the short-run, information about a perfectly competitive firm's fixed costs is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Answer:

The profit-maximizing level of output in a perfectly competitive market is determined at the level where marginal revenue (MR) equals marginal cost (MC). Marginal revenue is the additional revenue earned by selling an additional unit of output, while marginal cost is the additional cost of producing an additional unit of output (Farnham, 2014). Additionally, in order to find the amount of profit earned, we need to know the total cost and total revenue amounts. Total cost is the total of variable and fixed cost. Therefore, in short-run production, a firm's fixed cost is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Farnham, P (2014) Economics for Managers 3^rd edition

~Beth

I need a peer reply for this, please.