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Deck 12: Managerial Decisions for Firms With Market Power
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Question
refer to the following figure showing demand and marginal revenue for a monopoly.
-If production costs are constant and equal to $10 (i.e., LAC = LMC = $10), what price will the monopoly charge?
A) $5
B) $10
C) $15
D) $20
E) $25
-If production costs are constant and equal to $10 (i.e., LAC = LMC = $10), what price will the monopoly charge?
A) $5
B) $10
C) $15
D) $20
E) $25
Question
refer to the following figure:
The figure above shows the demand and cost curves facing a price-setting firm.
-The maximum profit the firm can earn is $________.
A) -$4,500
B) -$1,500
C) $7,500
D) $7,650
E) $8,000
The figure above shows the demand and cost curves facing a price-setting firm.-The maximum profit the firm can earn is $________.
A) -$4,500
B) -$1,500
C) $7,500
D) $7,650
E) $8,000
Question
refer to the following:
A manger of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
-The maximum profit the firm can earn is _____________.
A) $4,800 per week.
B) $3,000 per week.
C) $2,400 per week.
D) $1,800 per week.
E) -$1,800 per week.
A manger of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
-The maximum profit the firm can earn is _____________.
A) $4,800 per week.
B) $3,000 per week.
C) $2,400 per week.
D) $1,800 per week.
E) -$1,800 per week.
Question
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions:
where 
is quantity demanded, P is price, M is income, and 
is the price of a related good. The firm expects income to be $40,000 and 
to be $2. Total fixed cost is $100,000.
-What is the estimated demand function for the firm?
A)
= 71,000 - 500P
B)
= 39,000 - 200P
C)
= 39,000 - 500P
D)
= 40,000 - 200P
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the estimated demand function for the firm?
A)
= 71,000 - 500P
B)
= 39,000 - 200P
C)
= 39,000 - 500P
D)
= 40,000 - 200P
Question
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions: where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.
-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 16,000 units
E) 0 units, the firm shuts down
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 16,000 units
E) 0 units, the firm shuts down
Question
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions: where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.
-What is the firm's profit?
A) $147,000
B) $120,000
C) $220,000
D) $335,000
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the firm's profit?
A) $147,000
B) $120,000
C) $220,000
D) $335,000
Question
refer to the following:
The market demand for a monopoly firm is estimated to be:
where 
is quantity demanded, P is price, M is income, and 
is the price of a related good. The manager has forecasted the values of M and 
will be $50,000 and $20, respectively, in 2009.
-For 2009, the forecasted demand function is
A)
= 300,000 - 500P
B)
= 100,000 - 100P
C)
= 600,000 - 100P
D)
= 200,000 - 500P
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the forecasted demand function is
A)
= 300,000 - 500P
B)
= 100,000 - 100P
C)
= 600,000 - 100P
D)
= 200,000 - 500P
E) none of the above
Question
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-For 2009, the inverse demand function is
A) Q = 300 - 0.005P.
B) P = 600 - 0.001Q.
C) P = 300 - 0.002Q.
D) P = 600 - 0.004Q.
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the inverse demand function is
A) Q = 300 - 0.005P.
B) P = 600 - 0.001Q.
C) P = 300 - 0.002Q.
D) P = 600 - 0.004Q.
E) none of the above
Question
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-For 2009, the marginal revenue function is
A) MR = 290 - 0.5P.
B) MR = 580 - 0.001Q.
C) MR = 290 - 0.002Q.
D) MR = 600 - 0.004Q.
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the marginal revenue function is
A) MR = 290 - 0.5P.
B) MR = 580 - 0.001Q.
C) MR = 290 - 0.002Q.
D) MR = 600 - 0.004Q.
E) none of the above
Question
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The profit-maximizing level of output for 2009 is
A) 1,000 units.
B) 4,000 units.
C) 5,000 units.
D) 10,000 units.
E) 20,000 units.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The profit-maximizing level of output for 2009 is
A) 1,000 units.
B) 4,000 units.
C) 5,000 units.
D) 10,000 units.
E) 20,000 units.
Question
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The profit-maximizing price for 2009 is
A) $100.
B) $260.
C) $80.
D) $520.
E) $560.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The profit-maximizing price for 2009 is
A) $100.
B) $260.
C) $80.
D) $520.
E) $560.
Question
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The firm's profit is
A) $100,000.
B) $200,000.
C) $375,000.
D) -$182,000.
E) $800,000.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The firm's profit is
A) $100,000.
B) $200,000.
C) $375,000.
D) -$182,000.
E) $800,000.
Question
If demand is estimated to be
= 240 -6P, the inverse demand function is
A) P = 40 -0.1667Q.
B) P = 240 - Q.
C)
= 40 - P.
D)
= 240 - 12P.
E)
= 240 - 3P.
= 240 -6P, the inverse demand function is
A) P = 40 -0.1667Q.
B) P = 240 - Q.
C)
= 40 - P.
D)
= 240 - 12P.
E)
= 240 - 3P.
Question
If demand is estimated to be
= 240 -6P, the marginal revenue function is
A) MR = 40 - 0.33Q.
B) MR = 240 - 2Q.
C) MR = 40 - 2P.
D) MR = 240 - 12P.
E) MR = 240 - 6P.
= 240 -6P, the marginal revenue function is
A) MR = 40 - 0.33Q.
B) MR = 240 - 2Q.
C) MR = 40 - 2P.
D) MR = 240 - 12P.
E) MR = 240 - 6P.
Question
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted demand function for 2009 is:
A)
= 212,000 - 500P
B)
= 200,000 - 2,000P
C)
= 80,000 - 500P
D)
= 150,000 - 2,000P
E)
= 110,000 - 500P
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted demand function for 2009 is:
A)
= 212,000 - 500P
B)
= 200,000 - 2,000P
C)
= 80,000 - 500P
D)
= 150,000 - 2,000P
E)
= 110,000 - 500P
Question
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted marginal revenue function for 2009 is:
A) MR = 200,000 - 0.004Q
B) MR = 424 - 0.002Q
C) MR = 110 - 0.002Q
D) MR = 424 - 0.004Q
E) MR = 120 - 0.002Q
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted marginal revenue function for 2009 is:
A) MR = 200,000 - 0.004Q
B) MR = 424 - 0.002Q
C) MR = 110 - 0.002Q
D) MR = 424 - 0.004Q
E) MR = 120 - 0.002Q
Question
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The firm's forecasted profit (loss) in 2009 is a
A) loss of $100,000.
B) loss of $500,000.
C) profit of $100,000.
D) profit of $500,000.
E) profit of $908,000.
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The firm's forecasted profit (loss) in 2009 is a
A) loss of $100,000.
B) loss of $500,000.
C) profit of $100,000.
D) profit of $500,000.
E) profit of $908,000.
Question
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where 
is the quantity demanded, P is price, M is income, and 
is the price of a related good. The firm expects income to be $40,000 and 
to be $53. Total fixed cost is $2,600,000.
-What is the estimated demand function for the firm?
A)
= 1,040,000 - 2,000P
B)
= 800,000 - 4,000P
C)
= 800,000 - 500P
D)
= 1,600,000 - 2,000P
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the estimated demand function for the firm?
A)
= 1,040,000 - 2,000P
B)
= 800,000 - 4,000P
C)
= 800,000 - 500P
D)
= 1,600,000 - 2,000P
Question
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.
-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 20,000 units
E) 0 units, the firm shuts down
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 20,000 units
E) 0 units, the firm shuts down
Question
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.
-What is the firm's profit?
A) $1,470,000
B) $1,200,000
C) $1,600,000
D) -$2,600,000
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the firm's profit?
A) $1,470,000
B) $1,200,000
C) $1,600,000
D) -$2,600,000
Question
refer to the following.
A firm with two plants, A and B, has the following estimated demand and marginal cost functions:
-What is the profit-maximizing price?
A) $7
B) $8
C) $9
D) $9.50
E) none of the above
A firm with two plants, A and B, has the following estimated demand and marginal cost functions:
-What is the profit-maximizing price?
A) $7
B) $8
C) $9
D) $9.50
E) none of the above
Question
Question
refer to the following figure:
The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants.
-How should the firm allocate total output between the two plants in order to maximize
Profit?
A) 10 to plant 1, 40 to plant 2
B) 20 to plant 1, 30 to plant 2
C) 40 to plant 1, 40 to plant 2
D) 20 to plant 1, 60 to plant 2
E) 20 to plant 1, 50 to plant 2
The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants.
-How should the firm allocate total output between the two plants in order to maximize
Profit?
A) 10 to plant 1, 40 to plant 2
B) 20 to plant 1, 30 to plant 2
C) 40 to plant 1, 40 to plant 2
D) 20 to plant 1, 60 to plant 2
E) 20 to plant 1, 50 to plant 2
Question
This question refers to the following demand schedule for a monopoly firm:Price
-Between 100 and 200 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
-Between 100 and 200 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
Question
This question refers to the following demand schedule for a monopoly firm:Price
-Between 200 and 300 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
-Between 200 and 300 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
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Question
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Question
The following graph shows demand and marginal revenue for a monopoly.
-At any price above $_______ and quantity below ________ demand will be elastic. Marginal revenue is ____________ over this range.
-At any price above $_______ and quantity below ________ demand will be elastic. Marginal revenue is ____________ over this range.
Question
The following graph shows demand and marginal revenue for a monopoly.
-At any price below $_______ and quantity above ________ demand will be inelastic. Marginal revenue is _____________ over this range.
-At any price below $_______ and quantity above ________ demand will be inelastic. Marginal revenue is _____________ over this range.
Question
The following graph shows demand and marginal revenue for a monopoly.
-Demand is unitary elastic at a price of $______ and quantity of ________. Marginal revenue is _____________ at this price-quantity combination.
-Demand is unitary elastic at a price of $______ and quantity of ________. Marginal revenue is _____________ at this price-quantity combination.
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The following schedule shows demand and total cost for a firm with market power:
-To maximize profit firm should produce ______ units of output and charge a price of $_______.
-To maximize profit firm should produce ______ units of output and charge a price of $_______.
Question
The following schedule shows demand and total cost for a firm with market power:
-At this level of output the firm earns a profit of $________.
-At this level of output the firm earns a profit of $________.
Question
The following schedule shows demand and total cost for a firm with market power:
-The last unit of output produced and sold adds $________ to revenue and $________ to cost.
-The last unit of output produced and sold adds $________ to revenue and $________ to cost.
Question
The following schedule shows demand and total cost for a firm with market power:
-One more unit of output beyond the profit-maximizing level of output would add $________ to revenue and $________ to cost, thereby ___________ profit by $________.
-One more unit of output beyond the profit-maximizing level of output would add $________ to revenue and $________ to cost, thereby ___________ profit by $________.
Question
The following figure shows demand, marginal revenue, and short-run costs for a price-setting firm.
-To maximize profit the firm should produce an output of ________ and set a price of $_______.
-To maximize profit the firm should produce an output of ________ and set a price of $_______.
Question
The following figure shows demand, marginal revenue, and short-run costs for a price-setting firm.
-At this level of output total revenue is $________, total cost is $________, and the firm earns a profit of $________.
-At this level of output total revenue is $________, total cost is $________, and the firm earns a profit of $________.
Question
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-This firm should sell ________ units of output and set a price of $________.
-This firm should sell ________ units of output and set a price of $________.
Question
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-At this output and price the firm earns a profit of $________.
-At this output and price the firm earns a profit of $________.
Question
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-At this output and price the firm's revenue of $________ covers all $________ of its variable cost and the firm has $________ left over to apply to its fixed cost.
-At this output and price the firm's revenue of $________ covers all $________ of its variable cost and the firm has $________ left over to apply to its fixed cost.
Question
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-If the firm shut down it would lose ________________.
-If the firm shut down it would lose ________________.
Question
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $30, the firm will hire _________ workers.
-If the wage is $30, the firm will hire _________ workers.
Question
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $10, the firm will hire __________ workers. Total revenue is $________ (hint: ARP = P(Q/L), total variable cost is $________. If total fixed cost is $550, the firm earns a profit of $________.
-If the wage is $10, the firm will hire __________ workers. Total revenue is $________ (hint: ARP = P(Q/L), total variable cost is $________. If total fixed cost is $550, the firm earns a profit of $________.
Question
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $60, the firm will hire _________ workers.
-If the wage is $60, the firm will hire _________ workers.
Question
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the forecasted demand function?
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the forecasted demand function?
Question
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the inverse demand function?
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the inverse demand function?
Question
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the marginal revenue function?
The estimated average variable cost function is
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the marginal revenue function?
The estimated average variable cost function is
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A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the inverse marginal cost functions for each plant:
QA = _______________________
QB = _______________________
-Write the inverse marginal cost functions for each plant:
QA = _______________________
QB = _______________________
Question
A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the inverse total marginal cost function:
QT = _______________________
-Write the inverse total marginal cost function:
QT = _______________________
Question
A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the total marginal cost function:
MCT = _______________________
-Write the total marginal cost function:
MCT = _______________________
Question
A firm produces output in two plants, A and B. The marginal cost functions of each are
-When total output exceeds ___________ units, the firm uses both plants to produce.
-When total output exceeds ___________ units, the firm uses both plants to produce.
Question
A firm produces output in two plants, A and B. The marginal cost functions of each are
-5 If the firm wishes to produce 1,750 units of output, how will it allocate the output between the two plants? QA =_______ and QB =_______
-5 If the firm wishes to produce 1,750 units of output, how will it allocate the output between the two plants? QA =_______ and QB =_______
Question
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-Any output below ________ would all be produced in plant ______.
Draw in the total marginal cost curve and label it MCT.
-Any output below ________ would all be produced in plant ______.
Draw in the total marginal cost curve and label it MCT.
Question
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-If the firm wants to produce 1,000 units of output it would produce ________ in A and ________ in B.
-If the firm wants to produce 1,000 units of output it would produce ________ in A and ________ in B.
Question
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-To maximize profit the firm should produce ________ units of output and set a price of $_______.
-To maximize profit the firm should produce ________ units of output and set a price of $_______.
Question
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-This output should be allocated ________ units to plant A and ________ to B.
-This output should be allocated ________ units to plant A and ________ to B.
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Deck 12: Managerial Decisions for Firms With Market Power
1
refer to the following figure showing demand and marginal revenue for a monopoly.
-If production costs are constant and equal to $10 (i.e., LAC = LMC = $10), what price will the monopoly charge?
A) $5
B) $10
C) $15
D) $20
E) $25
-If production costs are constant and equal to $10 (i.e., LAC = LMC = $10), what price will the monopoly charge?
A) $5
B) $10
C) $15
D) $20
E) $25
$20
2
refer to the following figure:
The figure above shows the demand and cost curves facing a price-setting firm.
-The maximum profit the firm can earn is $________.
A) -$4,500
B) -$1,500
C) $7,500
D) $7,650
E) $8,000
The figure above shows the demand and cost curves facing a price-setting firm.-The maximum profit the firm can earn is $________.
A) -$4,500
B) -$1,500
C) $7,500
D) $7,650
E) $8,000
-$1,500
3
refer to the following:
A manger of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
-The maximum profit the firm can earn is _____________.
A) $4,800 per week.
B) $3,000 per week.
C) $2,400 per week.
D) $1,800 per week.
E) -$1,800 per week.
A manger of a firm with market power faces the marginal revenue product and average revenue product curves shown below. The firm incurs weekly fixed costs of $1,800. The firm employs a single variable input, labor, which costs $600 per worker each week.
-The maximum profit the firm can earn is _____________.
A) $4,800 per week.
B) $3,000 per week.
C) $2,400 per week.
D) $1,800 per week.
E) -$1,800 per week.
$3,000 per week.
4
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions: where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.
-What is the estimated demand function for the firm?
A)
= 71,000 - 500P
B)
= 39,000 - 200P
C)
= 39,000 - 500P
D)
= 40,000 - 200P
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the estimated demand function for the firm?
A)
= 71,000 - 500P
B)
= 39,000 - 200P
C)
= 39,000 - 500P
D)
= 40,000 - 200P
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5
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions: where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.
-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 16,000 units
E) 0 units, the firm shuts down
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 16,000 units
E) 0 units, the firm shuts down
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6
refer to the following:
A firm with market power faces the following estimated demand and average variable cost functions: where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.
-What is the firm's profit?
A) $147,000
B) $120,000
C) $220,000
D) $335,000
A firm with market power faces the following estimated demand and average variable cost functions:
where is quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $2. Total fixed cost is $100,000.-What is the firm's profit?
A) $147,000
B) $120,000
C) $220,000
D) $335,000
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7
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-For 2009, the forecasted demand function is
A)
= 300,000 - 500P
B)
= 100,000 - 100P
C)
= 600,000 - 100P
D)
= 200,000 - 500P
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the forecasted demand function is
A)
= 300,000 - 500P
B)
= 100,000 - 100P
C)
= 600,000 - 100P
D)
= 200,000 - 500P
E) none of the above
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8
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-For 2009, the inverse demand function is
A) Q = 300 - 0.005P.
B) P = 600 - 0.001Q.
C) P = 300 - 0.002Q.
D) P = 600 - 0.004Q.
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the inverse demand function is
A) Q = 300 - 0.005P.
B) P = 600 - 0.001Q.
C) P = 300 - 0.002Q.
D) P = 600 - 0.004Q.
E) none of the above
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9
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-For 2009, the marginal revenue function is
A) MR = 290 - 0.5P.
B) MR = 580 - 0.001Q.
C) MR = 290 - 0.002Q.
D) MR = 600 - 0.004Q.
E) none of the above
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-For 2009, the marginal revenue function is
A) MR = 290 - 0.5P.
B) MR = 580 - 0.001Q.
C) MR = 290 - 0.002Q.
D) MR = 600 - 0.004Q.
E) none of the above
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10
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The profit-maximizing level of output for 2009 is
A) 1,000 units.
B) 4,000 units.
C) 5,000 units.
D) 10,000 units.
E) 20,000 units.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The profit-maximizing level of output for 2009 is
A) 1,000 units.
B) 4,000 units.
C) 5,000 units.
D) 10,000 units.
E) 20,000 units.
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11
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The profit-maximizing price for 2009 is
A) $100.
B) $260.
C) $80.
D) $520.
E) $560.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The profit-maximizing price for 2009 is
A) $100.
B) $260.
C) $80.
D) $520.
E) $560.
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12
refer to the following:
The market demand for a monopoly firm is estimated to be: where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.
-The firm's profit is
A) $100,000.
B) $200,000.
C) $375,000.
D) -$182,000.
E) $800,000.
The market demand for a monopoly firm is estimated to be:
where is quantity demanded, P is price, M is income, and is the price of a related good. The manager has forecasted the values of M and will be $50,000 and $20, respectively, in 2009.-The firm's profit is
A) $100,000.
B) $200,000.
C) $375,000.
D) -$182,000.
E) $800,000.
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13
If demand is estimated to be
= 240 -6P, the inverse demand function is
A) P = 40 -0.1667Q.
B) P = 240 - Q.
C)
= 40 - P.
D)
= 240 - 12P.
E)
= 240 - 3P.
= 240 -6P, the inverse demand function is
A) P = 40 -0.1667Q.
B) P = 240 - Q.
C)
= 40 - P.
D)
= 240 - 12P.
E)
= 240 - 3P.
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14
If demand is estimated to be
= 240 -6P, the marginal revenue function is
A) MR = 40 - 0.33Q.
B) MR = 240 - 2Q.
C) MR = 40 - 2P.
D) MR = 240 - 12P.
E) MR = 240 - 6P.
= 240 -6P, the marginal revenue function is
A) MR = 40 - 0.33Q.
B) MR = 240 - 2Q.
C) MR = 40 - 2P.
D) MR = 240 - 12P.
E) MR = 240 - 6P.
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15
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted demand function for 2009 is:
A)
= 212,000 - 500P
B)
= 200,000 - 2,000P
C)
= 80,000 - 500P
D)
= 150,000 - 2,000P
E)
= 110,000 - 500P
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted demand function for 2009 is:
A)
= 212,000 - 500P
B)
= 200,000 - 2,000P
C)
= 80,000 - 500P
D)
= 150,000 - 2,000P
E)
= 110,000 - 500P
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16
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted marginal revenue function for 2009 is:
A) MR = 200,000 - 0.004Q
B) MR = 424 - 0.002Q
C) MR = 110 - 0.002Q
D) MR = 424 - 0.004Q
E) MR = 120 - 0.002Q
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The forecasted marginal revenue function for 2009 is:
A) MR = 200,000 - 0.004Q
B) MR = 424 - 0.002Q
C) MR = 110 - 0.002Q
D) MR = 424 - 0.004Q
E) MR = 120 - 0.002Q
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17
involve a profit-maximizing monopolist. Using time-series data, the demand function for the monopolist has been estimated as
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The firm's forecasted profit (loss) in 2009 is a
A) loss of $100,000.
B) loss of $500,000.
C) profit of $100,000.
D) profit of $500,000.
E) profit of $908,000.
?
where Qd is the amount sold, P is price, M is income, and PR is the price of a related good. The estimated values for M and PR in 2009 are $25,000 and $200, respectively. The short-run marginal cost curve for this firm has been estimated as:
Total fixed cost is forecast to be $500,000 in 2009.
-The firm's forecasted profit (loss) in 2009 is a
A) loss of $100,000.
B) loss of $500,000.
C) profit of $100,000.
D) profit of $500,000.
E) profit of $908,000.
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18
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.
-What is the estimated demand function for the firm?
A)
= 1,040,000 - 2,000P
B)
= 800,000 - 4,000P
C)
= 800,000 - 500P
D)
= 1,600,000 - 2,000P
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the estimated demand function for the firm?
A)
= 1,040,000 - 2,000P
B)
= 800,000 - 4,000P
C)
= 800,000 - 500P
D)
= 1,600,000 - 2,000P
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19
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.
-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 20,000 units
E) 0 units, the firm shuts down
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the profit-maximizing choice of output?
A) 8,000 units
B) 10,000 units
C) 12,000 units
D) 20,000 units
E) 0 units, the firm shuts down
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20
refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.
-What is the firm's profit?
A) $1,470,000
B) $1,200,000
C) $1,600,000
D) -$2,600,000
A price-setting firm faces the following estimated demand and average variable cost functions:
where is the quantity demanded, P is price, M is income, and is the price of a related good. The firm expects income to be $40,000 and to be $53. Total fixed cost is $2,600,000.-What is the firm's profit?
A) $1,470,000
B) $1,200,000
C) $1,600,000
D) -$2,600,000
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21
refer to the following.
A firm with two plants, A and B, has the following estimated demand and marginal cost functions:
-What is the profit-maximizing price?
A) $7
B) $8
C) $9
D) $9.50
E) none of the above
A firm with two plants, A and B, has the following estimated demand and marginal cost functions:
-What is the profit-maximizing price?
A) $7
B) $8
C) $9
D) $9.50
E) none of the above
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22
In order to maximize profit, a firm that produces its output in two plants will allocate total output between the two plants so that
A) marginal cost is equal for the two plants.
B) marginal cost for the firm is equal to the sum of the plants' marginal costs.
C) marginal revenue for the firm is equal to the sum of the plants' marginal costs.
D) all of the above
A) marginal cost is equal for the two plants.
B) marginal cost for the firm is equal to the sum of the plants' marginal costs.
C) marginal revenue for the firm is equal to the sum of the plants' marginal costs.
D) all of the above
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23
refer to the following figure:
The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants.
-How should the firm allocate total output between the two plants in order to maximize
Profit?
A) 10 to plant 1, 40 to plant 2
B) 20 to plant 1, 30 to plant 2
C) 40 to plant 1, 40 to plant 2
D) 20 to plant 1, 60 to plant 2
E) 20 to plant 1, 50 to plant 2
The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants.
-How should the firm allocate total output between the two plants in order to maximize
Profit?
A) 10 to plant 1, 40 to plant 2
B) 20 to plant 1, 30 to plant 2
C) 40 to plant 1, 40 to plant 2
D) 20 to plant 1, 60 to plant 2
E) 20 to plant 1, 50 to plant 2
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24
This question refers to the following demand schedule for a monopoly firm:Price
-Between 100 and 200 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
-Between 100 and 200 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
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25
This question refers to the following demand schedule for a monopoly firm:Price
-Between 200 and 300 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
-Between 200 and 300 units of sales, the elasticity of demand is ________ and marginal revenue is $________.
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26
Fill in the blanks:
-A monopoly can raise its price without _____________, because it has _____________.
-A monopoly can raise its price without _____________, because it has _____________.
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27
Fill in the blanks:
-Two related ways to measure the extent of a firm's market power are ____________ and _____________.
-Two related ways to measure the extent of a firm's market power are ____________ and _____________.
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28
Fill in the blanks:
-Monopolistically competitive firms will have their economic profit competed away in the long run because of ______________. They will however earn _____________ in the long run.
-Monopolistically competitive firms will have their economic profit competed away in the long run because of ______________. They will however earn _____________ in the long run.
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29
Fill in the blanks:
-A firm with market power will produce at a loss in the short run only if _____________. If this condition is met and the firm does produce at a loss, the firm will lose ____________(more, less) than its total fixed costs. In the long run, this firm will leave the industry if _______________.
-A firm with market power will produce at a loss in the short run only if _____________. If this condition is met and the firm does produce at a loss, the firm will lose ____________(more, less) than its total fixed costs. In the long run, this firm will leave the industry if _______________.
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30
The following graph shows demand and marginal revenue for a monopoly.
-At any price above $_______ and quantity below ________ demand will be elastic. Marginal revenue is ____________ over this range.
-At any price above $_______ and quantity below ________ demand will be elastic. Marginal revenue is ____________ over this range.
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31
The following graph shows demand and marginal revenue for a monopoly.
-At any price below $_______ and quantity above ________ demand will be inelastic. Marginal revenue is _____________ over this range.
-At any price below $_______ and quantity above ________ demand will be inelastic. Marginal revenue is _____________ over this range.
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32
The following graph shows demand and marginal revenue for a monopoly.
-Demand is unitary elastic at a price of $______ and quantity of ________. Marginal revenue is _____________ at this price-quantity combination.
-Demand is unitary elastic at a price of $______ and quantity of ________. Marginal revenue is _____________ at this price-quantity combination.
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33
Answer the following questions concerning a firm with market power:
-A monopoly will increase its usage of a variable input if _________________________ exceeds ______________________.
-A monopoly will increase its usage of a variable input if _________________________ exceeds ______________________.
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34
Answer the following questions concerning a firm with market power:
-A monopoly will decrease its usage of a variable input if _________________________ exceeds _________________________.
-A monopoly will decrease its usage of a variable input if _________________________ exceeds _________________________.
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35
Answer the following questions concerning a firm with market power:
-A monopoly will hire zero amount of a variable input if the wage rate is above _________________________.
-A monopoly will hire zero amount of a variable input if the wage rate is above _________________________.
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36
The following schedule shows demand and total cost for a firm with market power:
-To maximize profit firm should produce ______ units of output and charge a price of $_______.
-To maximize profit firm should produce ______ units of output and charge a price of $_______.
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37
The following schedule shows demand and total cost for a firm with market power:
-At this level of output the firm earns a profit of $________.
-At this level of output the firm earns a profit of $________.
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38
The following schedule shows demand and total cost for a firm with market power:
-The last unit of output produced and sold adds $________ to revenue and $________ to cost.
-The last unit of output produced and sold adds $________ to revenue and $________ to cost.
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39
The following schedule shows demand and total cost for a firm with market power:
-One more unit of output beyond the profit-maximizing level of output would add $________ to revenue and $________ to cost, thereby ___________ profit by $________.
-One more unit of output beyond the profit-maximizing level of output would add $________ to revenue and $________ to cost, thereby ___________ profit by $________.
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40
The following figure shows demand, marginal revenue, and short-run costs for a price-setting firm.
-To maximize profit the firm should produce an output of ________ and set a price of $_______.
-To maximize profit the firm should produce an output of ________ and set a price of $_______.
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41
The following figure shows demand, marginal revenue, and short-run costs for a price-setting firm.
-At this level of output total revenue is $________, total cost is $________, and the firm earns a profit of $________.
-At this level of output total revenue is $________, total cost is $________, and the firm earns a profit of $________.
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42
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-This firm should sell ________ units of output and set a price of $________.
-This firm should sell ________ units of output and set a price of $________.
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43
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-At this output and price the firm earns a profit of $________.
-At this output and price the firm earns a profit of $________.
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44
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-At this output and price the firm's revenue of $________ covers all $________ of its variable cost and the firm has $________ left over to apply to its fixed cost.
-At this output and price the firm's revenue of $________ covers all $________ of its variable cost and the firm has $________ left over to apply to its fixed cost.
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45
The following figure shows demand, marginal revenue, and short-run cost for a firm with market power.
-If the firm shut down it would lose ________________.
-If the firm shut down it would lose ________________.
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46
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $30, the firm will hire _________ workers.
-If the wage is $30, the firm will hire _________ workers.
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47
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $10, the firm will hire __________ workers. Total revenue is $________ (hint: ARP = P(Q/L), total variable cost is $________. If total fixed cost is $550, the firm earns a profit of $________.
-If the wage is $10, the firm will hire __________ workers. Total revenue is $________ (hint: ARP = P(Q/L), total variable cost is $________. If total fixed cost is $550, the firm earns a profit of $________.
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48
The following figure shows the average revenue product (ARP) and marginal revenue product curves of monopoly for its only variable input, labor.
-If the wage is $60, the firm will hire _________ workers.
-If the wage is $60, the firm will hire _________ workers.
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Unlock Deck
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49
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the forecasted demand function?
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the forecasted demand function?
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k this deck
50
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the inverse demand function?
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the inverse demand function?
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
k this deck
51
The manager of a monopoly firm obtained the following estimate of the demand for its product.
where M and
are, respectively, consumer income and the price of a related good. The forecasted values for M and
are M = $30,000 and
= $5.
-What is the marginal revenue function?
The estimated average variable cost function is
where M and are, respectively, consumer income and the price of a related good. The forecasted values for M and are M = $30,000 and = $5.-What is the marginal revenue function?
The estimated average variable cost function is
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52
The estimated average variable cost function is
AVC = 40 - 0.8Q + 0.0001Q2
-What is the estimated marginal cost function?
AVC = 40 - 0.8Q + 0.0001Q2
-What is the estimated marginal cost function?
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Unlock Deck
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53
The estimated average variable cost function is
AVC = 40 - 0.8Q + 0.0001Q2
-To maximize profit the firm should produce ______ units of output.
AVC = 40 - 0.8Q + 0.0001Q2
-To maximize profit the firm should produce ______ units of output.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
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54
The estimated average variable cost function is
AVC = 40 - 0.8Q + 0.0001Q2
-To maximize profit the firm should set a price of $______.
AVC = 40 - 0.8Q + 0.0001Q2
-To maximize profit the firm should set a price of $______.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
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55
The estimated average variable cost function is
AVC = 40 - 0.8Q + 0.0001Q2
-Check to see if the firm should produce in the short run rather than shut down.
AVC = 40 - 0.8Q + 0.0001Q2
-Check to see if the firm should produce in the short run rather than shut down.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
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56
The estimated average variable cost function is
AVC = 40 - 0.8Q + 0.0001Q2
-Total fixed cost is $5,000. The firm makes a profit (loss) of $______.
AVC = 40 - 0.8Q + 0.0001Q2
-Total fixed cost is $5,000. The firm makes a profit (loss) of $______.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
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57
A firm produces its output in two plants, A and B.
-To maximize its profit, the firm should produce the output at which ______ equals ______. It sets the price given by ______.
-To maximize its profit, the firm should produce the output at which ______ equals ______. It sets the price given by ______.
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Unlock for access to all 68 flashcards in this deck.
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58
A firm produces its output in two plants, A and B.
-It should allocate this output between the two plants so that ______ equals ______.
-It should allocate this output between the two plants so that ______ equals ______.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
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59
A firm produces its output in two plants, A and B.
-If marginal cost in plant A is $20 and the marginal cost in plant B is $15, the firm should reduce output in ______ and increase output in ______. As it continues this reallocation ______ will increase and ______ will decrease.
-If marginal cost in plant A is $20 and the marginal cost in plant B is $15, the firm should reduce output in ______ and increase output in ______. As it continues this reallocation ______ will increase and ______ will decrease.
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60
A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the inverse marginal cost functions for each plant:
QA = _______________________
QB = _______________________
-Write the inverse marginal cost functions for each plant:
QA = _______________________
QB = _______________________
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61
A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the inverse total marginal cost function:
QT = _______________________
-Write the inverse total marginal cost function:
QT = _______________________
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62
A firm produces output in two plants, A and B. The marginal cost functions of each are
-Write the total marginal cost function:
MCT = _______________________
-Write the total marginal cost function:
MCT = _______________________
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63
A firm produces output in two plants, A and B. The marginal cost functions of each are
-When total output exceeds ___________ units, the firm uses both plants to produce.
-When total output exceeds ___________ units, the firm uses both plants to produce.
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64
A firm produces output in two plants, A and B. The marginal cost functions of each are
-5 If the firm wishes to produce 1,750 units of output, how will it allocate the output between the two plants? QA =_______ and QB =_______
-5 If the firm wishes to produce 1,750 units of output, how will it allocate the output between the two plants? QA =_______ and QB =_______
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65
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-Any output below ________ would all be produced in plant ______.
Draw in the total marginal cost curve and label it MCT.
-Any output below ________ would all be produced in plant ______.
Draw in the total marginal cost curve and label it MCT.
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Unlock Deck
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66
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-If the firm wants to produce 1,000 units of output it would produce ________ in A and ________ in B.
-If the firm wants to produce 1,000 units of output it would produce ________ in A and ________ in B.
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Unlock Deck
k this deck
67
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-To maximize profit the firm should produce ________ units of output and set a price of $_______.
-To maximize profit the firm should produce ________ units of output and set a price of $_______.
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Unlock for access to all 68 flashcards in this deck.
Unlock Deck
k this deck
68
The following figure shows demand and marginal revenue for a firm that produces in two plants, A and B, the marginal cost curves of which are shown, respectively, as MCA and MCB.
-This output should be allocated ________ units to plant A and ________ to B.
-This output should be allocated ________ units to plant A and ________ to B.
Unlock Deck
Unlock for access to all 68 flashcards in this deck.
Unlock Deck
k this deck
Unlock Deck
Unlock for access to all 68 flashcards in this deck.
