Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello my Dear please help me too with graph it will be better if you draw it as well that going to help to not

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Hello my Dear please help me too with graph it will be better if you draw it as well that going to help to not miss anything . thank you

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Fill in the price and the total, marginal, and average revenue SendIt earns when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity Price Total Revenue Marginal Revenue Average Revenue (Trucks) (Dollars per truck) (Dollars) (Dollars) (Dollars per truck) 0 0 1 : |:| 2 :1 |:] 3 j |:] The demand curve faced by SendIt is identical to which of its other curves? Check all that apply. C] Average revenue curve C] Marginal cost curve C] Supply curve C] Marginal revenue curve 3. Profit maximization using total cost and total revenue curves Suppose Rian operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a market price equal to $20 per romper. The following graph shows Rian's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero through seven (including zero and seven) that Rian produces. 200 O 175 Total Revenue 150 Total Cost A 125 Profit 100 TOTAL COST AND REVENUE (Dollars) 50 25 25 2 3 4 5 6 7 8 QUANTITY (Rompers)Calculate Rian's marginal revenue and marginal cost for the rst seven rompers they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. /_\\ [\\3/ 40 - O A 35 g Marginal Revenue E 9 30 a El 0. III % 25 _ MarginalCost E! Lu _ 3 20 2 Lu 5 n: 15 - D E; w 10 - ,_ (I: O o 5 - o . . . . . . . . 0 1 2 3 4 5 6 7 8 QUANTITY (Rompers) Rian's prot is maximized when they produce a total of rompers. At this quantity, the marginal cost of the final romper they produce is , an amount V than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is C] , an amount V than the price received for each romper they sell. Therefore, Rian's profitmaximizing quantity occurs at the point of intersection between the V curves. Because Rian is a price taker, the previous condition is equivalent to V 4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. (r? \\J/ 50 45 40 Prot or Loss 35 3 ATC 25 20 PRICE (Dollars per romper) 15 10 AVG MC 0 | | | | | | | | | | 0 2 4 6 8 10 12 14 16 18 20 QUANTITY (Thousands of rompers per day) In the short run, given a market price equal to $15 per romper, the firm should produce a daily quantity of V rompers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents prot or loss of the rm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a shortrun V of thousand per day for the firm. 5. Profit maximization and shutting down in the short run The following graph plots daily cost curves for a firm operating in the competitive market for pressure cookers. 100 90 80 ATC 70 60 50 PRICE (Dollars per pressure cooker) 40 30 20 AVC 10 MC 0 O 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pressure cookers)Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the rm '5 total variable cost, calculate the prot or loss associated with producing that quantity. Assume that if the rm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per pressure cooker) (Pressure cookers) (Dollars) (Dollars) (Dollars) (Dollars) 25.00 v 1,600,000 70.00 v 1,500,000 100.00 v 1,600,000 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 rm 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 pricethat is, the price below which it is optimal for the firm to shut downis V per pressure cooker. 6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for jumpsuits. (? 100 90 70 60 ATC. 50 COSTS (Dollars) 40 30 20 AVC MC O 10 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jumpsuits)For every price level given in the following table, use the graph to determine the prot-maximizing quantity of jumpsuits for the rm. Further, select whether the rm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the rm is indifferent between producing zero jumpsuits and the prot-maximizing quantity of jumpsuits. ) Lastly, determine whether the rm will earn a prot, incur a loss, or break even at each price. Price Quantity (Dollars per jumpsuit) (Jumpsuits) Produce or Shut Down? Profit or Loss? 15 v V V 20 V V V 25 v V Y 55 v v v 70 V V V 85 v V V On the following graph, use the orange points (square symbol) to plot points along the portion of the rm '5 short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) 100 El 90 80 Firm's Short-Run Supply 70 60 50 40 30 PRICE (Dollars perjumpsuit) 20 10 0 | l l l l | | l l l 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of jumpsuits) Suppose there are 7 firms in this industry, each of which has the cost curves previously shown. On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot these points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) Next, place the black point (plus symbol) on the graph to indicate the shortrun equilibrium price and quantity in this market. Note: Dashed drop lines will automatically extend to both axes. Note: Dashed drop lines will automatically extend to both axes. 100 90 Demand Industry's Short-Run Supply 80 70 Equilibrium 60 50 PRICE (Dollars per jumpsuit) 40 30 20 10 0 70 140 210 280 350 420 490 560 630 700 QUANTITY (Thousands of jumpsuits) At the current short-run market price, firms will in the short run. In the long run,7. Short-run supply and long-run equilibrium Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. 100 90 80 70 60 COSTS (Dollars per pound) 50 40 ATC 30 20 10 MC AVC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds)The following graph plots the market demand curve for rhodium. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve. ) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. (? 100 90 80 Supply (10 firms) 70 60 Supply (20 firms) PRICE (Dollars per pound) 50 A 40 Supply (30 firms) Demand 30 20 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 10 firms in this market, the short-run equilibrium price of rhodium would be |$ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would the rhodium market.Because you know that competitive firms earn V economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be V firms operating in the rhodium industry in longrun equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. 0 True 0 False 8. Short-run and long-run effects of a shift in demand Suppose that the tempeh industry is initially operating in long-run equilibrium at a price level of $5 per pound of tempeh and quantity of 200 million pounds per year. Suppose a top medical journal publishes research that animalalternative protein sources such as tempeh could decrease your expected lifespan by 4 years. The publication is expected to cause consumers to demand V tempeh at every price. In the short run, firms will respond by V Shift the demand curve, the supply curve, or both on the foilowing graph to illustrate these short-run effects of the publication. a (D 10 -- Supply Demand 5 SUPply 5 ---------+ PRICE (Dollars per pound) Demand N -- 0 -. l l l l l l l l i 0 40 80 120 160 200 240 280 320 360 400 QUANTITY (Millions of pounds) In the long run, some firms will respond by until Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects of the publication and the new long- run equilibrium after firms and consumers finish adjusting to the news. 10 O 9 Supply Demand 6 Supply PRICE (Dollars per pound) w Demand N 40 80 120 160 200 240 280 320 360 400 QUANTITY (Millions of pounds) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is in the long run

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

Macroeconomics

Authors: David C. Colander

10th edition

1259663043, 1259663048, 978-1259663048

More Books

Students also viewed these Economics questions