It is the month of June, which is the peak season for producing rye. At the current level of output of 800 units of wheat, the following data exists: Price = $16 Marginal cost $8 Marginal Revenue-$8 Average variable cost = $10 Average total cost = $19 Based on these figures, as an microeconomic advisor, what would you advise this firm to do? The firm should shut down production. Not sure. The firm should raise the price and make a loss. The firm should continue to produce more wheat.
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- For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Price (Dollars per oven) 25.00 70.00 100.00 Quantity (Ovens) Total Revenue (Dollars) Fixed Cost (Dollars) 1,600,000 1,600,000 1,600,000 Variable Cost (Dollars) Profit (Dollars) If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $1,600,000 per day. In other words, if it shuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the…Consumer and Producer Theory A small marketing agency has the following cost structure. Monthly rent on office space = *50,000 Monthly wages of each copywriter = 20,000 Here are the units of output produced per month according to the number of copywriters hired. No. of copywriters Units produced per month 4 5 6 1.0 1 7 2 4 01 6 7 8 9 10 30 55 75 90 100 108 Till what number of copywriters was the firm experiencing economies of scale? 114 118 116 117A price-taking firm makes air conditioners. The market price of one of its new air conditioners is $130. The firm's total cost information is given in the table below: Instructions: Calculate marginal cost, and enter your responses as whole numbers. Air conditioners per day Total cost Marginal cost ($ per day) ($ per day) 1 100 100 2 150 3 220 4 310 5 405 6 510 7 650 8 800 How many air conditioners should the firm produce per day if its goal is to maximize its profit? air conditioners per day.
- You are economic consultant for Jack, who farms raw cotton in a perfectly competitive market. One day he gives you the following data at his present level of production: Output = 2000 pounds, market price = $5.00, total cost =$8000, fixed cost=$2000, marginal cost=$5. The minimum of AVC occurs at {1000 pounds at $2} and the minimum of ATC at {1500 pounds at $3.5}. Please help Jack with the following questions based on the above figures: Draw a graph for the raw cotton market and a graph for Jack’s farm current situation that includes MC, ATC, and AVC, labeling all relevant points on axes with numerical values. Is Jack maximizing the profit (minimizing the loss)? Why or why not? Label the total profit/loss area. Suppose more farmers enter the raw cotton market until the market price is $3.00 per pound. On the same graphs, show the effect of this change in the market place. Would you like to suggest Jack leaving the market in the short run? Explain your answer.Hightide Upholstery Company manufactures a special fabric used to upholster the seats in power boats. The company’s annual fixed production cost is $100,000.Required:1. Draw a graph of the company’s fixed production cost showing the total cost at the following production levels of upholstery fabric: 10,000 yards, 20,000 yards, 30,000 yards, and 40,000 yards.2. Prepare a table that shows the unit cost and the total cost for the firm’s fixed production costs at the following production levels: 1 yard, 10 yards, 10,000 yards, and 40,000 yards.3. Prepare a graph that shows the unit cost for the company’s fixed production cost at the following production levels: 10,000 yards, 20,000 yards, 30,000 yards, and 40,000 yards.The graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for a firm in a competitive market. These curves imply a short-run supply curve that has two distinct parts. One part, not shown, lies along the vertical axis (quantity-0); this represents a condition of production shutdown. Where is the other part? Use the straight-line tool to drawit. To refer to the graphing tutorial for this question type, please click here Price and cost 18 15 14 13 12 10 19/21 SUBMIT ANSWER 13 OF 21 QUESTIONS C OMPLETED 28 MacBook Pro 금□ F7 F8 F9 F1o F2 F3 F5
- An ice cream producer has fixed costs of $70,000 per month, and it can produce up to 15,000 ice cream tubs per month. Each tub costs $10 in the market while the producer faces variable costs of $3 per tub. What is the economic breakeven level of production? b. Calculate the ice cream producer’s monthly profits at full capacity. What would happen to the monthly profits if another ice cream producer entered the market, driving the price of ice cream tubs down to $7 per unit?If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market? Include a detailed set of graphs showing both the market and firm long run equilibration in reaction to the change. (Use of ai bot IS strictly prohibited. )The following table shows data for quantity (Q), variable cost (VC), and fixed cost (FC) for a ski company. a) Fill the table for total cost (TC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC). Make sure to show your work for at least one line. Q VC FC TC ATC AVC MC 30 1 10 30 25 30 3 45 30 4 70 30 100 30 6 135 30 b) Now suppose the firm decides to produce a quantity of 5 units (Q=5), and it sells for a price of $25 each. Answer the following: 1. Calculate the company's profits or losses 2. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? 3. At the given quantity and price, is the marginal unit produced adding or subtracting to profits? Should the fırm produce at this level of output?
- At a market price of $5 your artisanal pencil business maximizes profits by producing 484 pencils per day. When you produce this quantity of pencils per day, your average cost per unit is $4. What is your total revenue per day? $ What is your total cost per day? $ What is your daily profit? $The table below represents the costs of producing sneakers. Quantity 10 17 24 31 38 Fixed Cost $112 $112 $112 $112 $112 Variable Cost $15 $40 $65 $90 $115 Total Cost $127 $152 $177 $202 $227 Provide your answer below: Average Fixed Cost ? ? ? ? ? Average Variable Cost ? ? ? ? ? Find the average fixed cost for producing 31 sneakers. Round your answer to the nearest cent. Average Total Cost ? ? ? ? ?For each of the following events identify which of the determinates of demand or supply are affected. Also indicate whether demand or supply is increased or decreased. Why? A stock market crash lowers people’s wealth. Batelco increases the prices of mobile services. Diminishing returns mean rising costs while economies of scale mean falling costs. Therefore, a firm cannot be facing both diminishing returns and economies of scale. Do you agree? Why or why not?