Kanesha is an entrepreneur and has recently opened her first coffee shop, The Coffee Cat. She pays $5,000 rent each month, $4,800 for monthly employee payroll, and $1,200 for supplies each month. She was planning on selling several of her own tables and chairs on Craigslist for $1,500, but instead she brought them to The Coffee Cat. Additionally, she quit working as an accountant where she was earning $52,000 per year to open up the shop. If the shop earns $180,000 in revenue this year, calculate annual: Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Hint: Be sure to calculate explicit costs as annual costs. a. Accounting profit. b. Economic profit. Price or Cost (dollars per bushel) 18 16 14 12 10 8 6 10 2 Price Marginal revenue Marginal cost 0 1 2 3 4 5 6 7 Quantity (bushels of fish per day) Number of Bushels Price (per Day) Total Total Revenue Cost Total Profit Marginal Marginal Revenue Cost 0 $13 $0 $10 $-10 1 13 13 15 -2 $13 $5 2 13 26 22 4 13 7 3 13 39 31 8 13 9 4 13 52 44 8 13 13 5 13 65 61 4 13 17 If the price of catfish fell from $13 to $7 per bushel, determine the Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers a. profit-maximizing output. bushel(s) b. total profit or loss Complete the following cost and revenue schedules for a perfectly competitive firm. Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers Quantity Price Total Total Marginal Revenue Cost Cost 0 $50 $50 1 50 60 2 50 90 3 50 140 4 50 200 5 50 280 a. Graph marginal cost (MC) Instructions: Use the 'MC' tool to draw the marginal cost curve point by point (plot 5 points total). 20 8&&&&&& 100 Price or Cost (dollars per unit) P-MR Tools MC 11 1 2 3 4 5 Quantity (units per time period) b. What quantity maximizes profit? units c. What is MC at that quantity? $ Problem 08-06 v2 Assume the price of the product is $12. Complete the table, and then answer some questions. Instructions: Round your responses to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Price (P) Quantity (a) Total Cost (TC) Marginal Cost (MC) Average Total Total Revenue Cost (ATC) Profit (TR) $12 $9 $0 12 T 12 12 12 2 16 24 12 3 21 36 12 A 30 48 12 5 40 60 12 6 52 72 12 7 66 84 At what output rate is Instructions: Enter your responses as a whole number. a. total revenue maximized? units b. ATC minimized? units d. total profit maximized? (Hint: Use the profit-maximizing rule) units Assume the price of silk ties in a perfectly competitive market is $21 and that the typical firm confronts the following costs: Quantity (ties per day) 0 Total Cost $10 1 17 2 26 3 37 4 50 5 65 6 82 7 101 8 122 9 145 10 170 Instructions: Enter your responses as a whole number. a. What is the profit-maximizing rate of output for the firm? (Hint Use the profit-maximizing rule.) ties per day b. How much profit does the firm earn at that rate of output? c. If the price of ties fell to $15, how many ties should the firm produce? ties per day d. At what price should the firm shut down? Less than $[ Complete the following table for a perfectly competitive firm. Instructions: Round your responses to two decimal places. Output Total Cost Marginal Cost Average Average Total Cost Variable Cost 0 $100 5 110 10 130 15 170 20 220 25 290 30 35 380 490 Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. If the price is $10, how much output will the firm supply? (Hint: Use the profit-maximizing rule and enter the quantity in the discrete 5- unit increment as shown in the table.) units b. How much profit or loss will it make? c. At what price will the firm shut down? Less than $ Problem 08-10 A firm has leased plant and equipment to produce video games, which can be sold in unlimited quantities at $13 each. The following figure describes the firm's costs of production: Rate of output (per day) Total cost (per day) 0 $50 $55 $62 3 5 $75 $96 $125 $162 $203 $248 Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. How much are fixed costs? b. What is the profit-maximizing rate of output? units c. Calculate profits or losses at this profit-maximizing rate of output. $ d. How much is lost if the firm shuts down? (Do not include a negative sign with your answer) e. Should the firm produce or shut down in the short run? The firm should (Click to select) in the short run