2.) Dwight's Dairy Farm produces cream, which is sold in a perfectly competitive market. The table below shows cost figures for several levels of output. Output Marginal Cost Average Variable Cost Average Total Cost (gallons) O --- --- 1,000 $11 $14 $24 2,000 $12 $13 $18 3,000 $16 $14 $17.33 4,000 $20 $15.50 $18 5,000 $25 $17.40 $19.40 6,000 $30 $20 $21.17 7,000 $36 $21.86 $23.29 (a) [1 point] If the price of cream is $25 per gallon, what is the profit-maximizing output level? (b) [2 points] If the price of cream is $25 per gallon, what is the total profit for this firm? sure momingvog Slow Tony worde bris anofjesusp le pewens ozsold . (emioq 10) anumgo? amoldones ) (c) [1 point] If the price of cream is $16 per gallon, what is the profit-maximizing output level? OSI (d) [2 points] If the price of cream is $16 per gallon, what is the total profit for this firm? enoftenidmon avi ed to doiw , 818 809 (rods!) wod-how s bus ,068 2food (linqso) word sniderin (e) [2 points] What is the total fixed cost for this firm?16.) For a monopolist, the profit-maximizing output level is found where A) MC =Price B) MR = Price. CJ MR = MC. DJ MR = 0. [eriolien) 17.) Suppose a monopolist's marginal revenue is MR = 30 - 20 and its marginal cost is MC = 6 +20. The profit- maximizing quantity is 000.1 A) 2. 000.S B) 4. C) 6. D) 24. 812 090.5 18.) Compared with a perfectly competitive industry, a monopoly will produce A) greater output, a higher price, and a gain in economic surplus. 900 B) greater output, a lower price, and a gain in economic surplus. de2 C) lower output, a higher price, and a loss in economic surplus. D) lower output, a lower price, and a loss economic surplus. 19.) One reason why many movie theaters charge lower admission for senior citizens is that A) senior citizens have a more elastic demand than other movie-goers. B) senior citizens have a less elastic demand than other movie-goers. C) movie-theater owners don't maximize their profits. D) the government makes them do it. on ase al mooto lo galiq odd Il jaming S) (d). Part 2: Problems Section (21 points). Please answer all questions and show your work. 1. (3 points=1+2) The following table shows five different production methods that Ron's Foundry can use to produce 10 tons of steel. Assume marginal returns are always diminishing. Combination | Marginal Product of Marginal Product Capita of Labor 130 260 160 200 200 150 240 120 265 100 arla 11 [amnion S] (h) (a) Which of the five methods uses the least amount of capital and the most amount of labor? (b) If a machine-hour (capital) costs $30, and a worker-hour (labor) costs $15, which of the five combinations minimizes the cost of producing the output? Explain how you found your answer. This study source was downloaded by 100000810021609 from CourseHero.com on 05-15-2023 00:02:26 GMT -05:00