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Price = $20, quantity = 400 units, unit cost = $15,
implicit costs $ = 4,000. What does economic profit equal?
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- A bookstore sells 90 textbooks at a price of $70 a book. The average total cost is $50 per textbook. How much profit in dollars does the bookstore make?The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00 a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is (Click to select) falling rising at a minimum and the marginal cost of cheeseburger production is (Click to select) falling rising at a minimum . b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is (Click to select) falling rising at a minimum and the average total cost of cheeseburger production is (Click to select) falling rising at a minimum .Should the Marginal revenue exceed the marginal cost? Why?
- Tim is thinking of opening a garment store. He estimates that it would cost $270000 per year to rent the location and buy the merchandise. In addition, he would have to quit his $63000 per year day job. Tim estimates he can sell $315600 worth of garments in a year. a. What will be the accounting profit and economic profit for Tim? b. If you are an economist, should you suggest opening the store? Why?Marginal revenue must exceed marginal cost.Explain why?In a business where, fixed costs are very high (i.e. the production of a new Music CD, or the research and development of a new cancer drug) and the marginal costs are very low why can't price equal marginal cost?
- How do you calculate a firm's total cost and total revenue?You turned down a job at ABC Corp last year that would have paid you $125,000 per year and started your own company. When you calculated your economic profit, it came out at $0. You expect the business will be exactly the same next year. ABC called and said you could still take the job. You should... A. Keep running your company as-is. B. Keep running your company but pay yourself less. C. Keep running your company but pay yourself more. D. Shut down your company and take the job at ABC.If marginal profit is $33 and marginal revenue is $80 What's the value of Marginal cost
- Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. What is the Total profit for Billy’s Bean Bag Emporium? Include in your answer your calculationi. Calculate the marginal cost, marginal revenue and profit for each unit of production. ii. How many units should the firm produce to maximise profit?
