What is the firm’s corresponding average total cost (ATC) per unit produced? The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectlycompetitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC)curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as themarginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directlyon a vertical tick, then it is exactly halfway between the one above and the one below.)J'Aime Bakery - Cost & Revenue Curves350300-01$250-200-150-100-50-☑3456Quantity (Q)7 8 910Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations.(a) What is the optimal price (P*) that the firm charges?P* = $ 55 per unit(b) What is the optimal amount of bread (Q*) that the firm produces?Q* = 5 units(c) What is the firm's corresponding average total cost (ATC) per unit produced?ATC = $ per unit(d) What is the resulting total revenue (TR) that the firm brings in?TR = $275(e) What is the firm's corresponding total cost (TC) of production?TC = $☐(f) What is the firm's resulting profit (TT)?(Hint: Don't forget the negative sign if the firm is losing money!)TT = $

A perfectly competitive market is a market structure that consists of many small firms and many…

The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P*) that the firm charges? P* = $ 55 per unit (b) What is the optimal amount of bread (Q*) that the firm produces? Q* = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit

The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P) that the firm charges? P = $ 55 per unit (b) What is the optimal amount of bread (Q) that the firm produces? Q = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

See similar textbooks

Similar questions

The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00 a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is (Click to select) falling rising at a minimum and the marginal cost of cheeseburger production is (Click to select) falling rising at a minimum . b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is (Click to select) falling rising at a minimum and the average total cost of cheeseburger production is (Click to select) falling rising at a minimum .
Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Dmitri's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Dmitri produces. Dmitri's profit is maximized when he produces frying pans. When he does this, the marginal cost of the last frying pan he produces is , which is than the price Dmitri receives for each frying pan he sells. The marginal cost of producing an additional frying pan (that is, one more frying pan than would maximize his profit) is , which is than the price Dmitri receives for each frying pan he sells. Therefore, Dmitri's profit-maximizing quantity corresponds to the intersection of the curves. Because Dmitri is a price taker, this last condition…
Suppose Jayden operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with a market price equal to $20 per phone case. The following graph shows Jayden's total cost curve. Jayden's profit is maximized when they produce a total of ____phone cases. At this quantity, the marginal cost of the final phone case they produce is ___, an amount ( greater or less)than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is ____, an amount(greater or less)than the price received for each phone case they sell. Calculate the marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points to plot marginal revenue and the orange points to plot marginal cost at each quantity.
The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. (use MC, ACT, and AVC) Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market.
Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.
Delvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary. From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer. Calculate Delvin’s accounting profit per day. How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand?
Suppose Rosa runs a small business that manufactures frying pans. Assume that the market for frying pans is a perfectly competitive market, and the market price is $20 per frying pan. The following graph shows Rosa's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven frying pans that Rosa produces, including zero frying pans.
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.
Assuming the market equilibrium price for tomatoes is $1.75 per kilo in perfect competition market. Draw the total revenue and marginal revenue curves for the typical tomato grower on the same graph. Explain how marginal revenue and price are related to the total revenue.
Consider the perfectly competitive market for sports jackets. The following graph shows the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves for a typical firm in the industry.
Provide example of economic profit( explicit, implicit costs)
The graph below summarizes the demand and costs for a firm that operates in a perfectly competitive market. Instructions: Use the nearest whole numbers on the graph when calculating numerical responses below. " A graph summarizes the demand and costs for a firm that operates in a perfectly competitive market.""The horizontal axis labeled quantity ranges from 0 to 11 in increments of 1. The vertical axis labeled dollar ranges from 0 to 48 in increments of 4. A horizontal line labeled D-superscript f = M R enters the quadrant through the point (0, 28). An upward-facing curve labeled M C begins at the point (0.5, 20) goes down to the right with decreasing steepness to a low point at (3.5, 8) then goes up to the right with increasing steepness to end at the point (8, 40). A second upward-facing curve labeled A V C begins at the point (0.5, 22) goes down to the right with decreasing steepness to a low point at (5, 12) then goes up to the right with increasing steepness to end at the…