Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can u help me with the calculation for these please DEPARTMENT OF ECONOMICS ECON1012: Principles of Economics II Problem Set 13: The Production Decision 1.

image text in transcribed

can u help me with the calculation for these please

image text in transcribed
DEPARTMENT OF ECONOMICS ECON1012: Principles of Economics II Problem Set 13: The Production Decision 1. The diagram provides isoprofit and demand curves for a typical firm. a) On the Q axis, identify the profit-maximizing level of output. b) On the $ axis, indicate the average revenue per unit sold. c) On the $ axis, indicate the average cost per unit sold. d) On the $ axis, indicate the profit per unit. 2. Draw an isoprofit map and demand curve for a firm that is making a loss. 3. Calculate and sketch the corresponding isoprofit curve over the range one to six units per month for a business that wants to make a profit of $600 per month where a) it has a constant cost per unit of $400. b) It has fixed costs of $300 and variable cost of $50 for the first unit which then rises by $50 for each additional unit produced. 4. In the short run, which of the following costs for StayFresh Bakery Company are likely to be fixed costs and which variable? a) Flour. b) Wages for workers in the bakery. c) Rental for the executive offices. d) Rental for the bakery plant. e) The salary of the Chief Executive Officer. () Plastic bags in which the bread is packaged. g) Advertising and Marketing expenses. h) Petrol for the delivery trucks. 5. Suppose the pan chicken man pays protection money of $500 a night to the area leader, fuel for a night's worth of flame is $200, and chicken parts and spices for one serving of chicken cost $100. a) Which costs are fixed and which are variable? b) For the first through the fifth customers, calculate the vender's (i) total cost, (ii) average cost, and (iii) marginal cost. ) Speculate on what will happen to his average cost as the number of customers keep growing. 6. Why is the average cost curve U-shaped

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward

5th Edition

1337106666, 978-1337106665

More Books

Students also viewed these Economics questions