(Solved) Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly ...

tarasen57

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Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly ...

Question 1.

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.

Refer to Figure 12-5. If the market price is $20, what is the firm's profit-maximizing output?

▸

750 units

▸

1,100 units

▸

1,350 units

▸

1,800 units

Question 2.

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.

Refer to Figure 12-5. If the market price is $20, what is the amount of the firm's profit?

▸

$5,400

▸

$6,750

▸

$8,100

▸

$16,200

Textbook

InMicro

Edition: 1^st

Authors: Hubbard, O'Brien

Read 205 times

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Steve T.

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More solutions for this book are available here

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tarasen57 Author

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4 years ago

Thanks

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dskmvld

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4 years ago

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.

Refer to Figure 12-5. The firm's manager suggests that the firm's goal should be to maximize average profit. In that case, what is the output level and what is the average profit that will achieve the manager's goal?

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Q = 1,800 units, average profit = $20

▸

Q = 1,100 units, average profit = $6

▸

Q = 1,350 units, average profit = $5

▸

Q = 1,350 units, average profit = $9

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kwashington67

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4 years ago

Q = 1,100 units, average profit = $6

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zar

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4 years ago

Question 1.

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.

Refer to Figure 12-5. What is the amount of the firm's fixed cost of production?

▸

$5,400

▸

$6,750

▸

$8,100

▸

It cannot be determined.

Question 2.

Figure 12-5

Figure 12-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.

Refer to Figure 12-5. If the firm's fixed cost increases by $1,000 due to a new environmental regulation, what happens in the diagram above?

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Only the average variable cost and average total cost curves shift upward; marginal cost is not affected.

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Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.

▸

All the cost curves shift upward.

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None of the curves shifts; only the fixed cost curve, which is not shown here, is affected.

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joanamet

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4 years ago

Answer 1

$5,400

Answer 2

Only the average total cost curve shifts upward; the marginal cost and average variable cost curves are not affected.

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zar

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4 years ago

Smart ... Thanks!

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Bilaal S.

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3 years ago

Thanks

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