Use this table to answer the following question. Output Total Variable Cost 1 $20 2 $24 3 $33 4 $40 IT 5 $45 6 $60 7 $77 8 $96 9 $180 $200 10 The government just mandated that all firms must install a new technology to reduce pollution. The new technology costs $3. The market price is $10. In the long run, will the firm stay open or shut down? Select the best answer. Answer O The firm will stay open. O There is not enough information to determine what the firm will do. O The firm will shut down. Keypad Keyboard Shortcuts

Use this table to answer the following question. Output Total Variable Cost 1 $20 2 $24 3 $33 4 $40 IT 5 $45 6 $60 7 $77 8 $96 9 $180 $200 10 The government just mandated that all firms must install a new technology to reduce pollution. The new technology costs $3. The market price is $10. In the long run, will the firm stay open or shut down? Select the best answer. Answer O The firm will stay open. O There is not enough information to determine what the firm will do. O The firm will shut down. Keypad Keyboard Shortcuts

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

A small town with a movie theater has 300 adults and 200 seniors. The theater is considering putting on a special one-time screening of a new movie. This screening has a fixed cost of $2,000, but the marginal cost of selling an additional ticket is zero. According to a survey, all the adults and seniors would be willing to purchase the tickets at $7 and $4 respectively. a. What prices would the movie theater charge for an adult ticket and for a senior's ticket if it wanted to maximize profit? Explain and calculate the profit. b. Suppose a law is passed that prohibits the movie theater from charging different prices to adults and seniors. What price would it set for a ticket now? What is the profit? c. Who is worse off because of the law prohibiting price discrimination? Who is better off? d. If the fixed cost of the concert was $2,500 rather than $2,000, how would your answers to parts-(e) change?
The market for apple pies in the city of Ectenia iscompetitive and has the following demand schedule:Price Quantity Demanded$1 1,200 pies2 1,1003 1,0004 9005 8006 7007 6008 5009 40010 30011 20012 10013 0Each producer in the market has fixed costs of $9 andthe following marginal cost schedule:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producer’s total cost andaverage total cost for each quantity from 1 to6 pies.b. The price of a pie is now $11. How many pies aresold? How many pies does each producer make?How many producers are there? How much profitdoes each producer earn?c. Is the situation described in part (b) a long-runequilibrium? Why or why not?d. Suppose that in the long run there is free entryand exit. How much profit does each producerearn in the long-run equilibrium? What isthe market price? How many pies does eachproducer make? How many pies are sold inthe market? How many pie producers areoperating?
Gater Tools, a profit-maximizing firm, has a patent on a power tool, making it the only producer of that power tool. Thegraph above shows GaterTools' demand, marginal revenue, average total cost, average variable cost, and marginal costcurves.(a) Calculate GaterTools' total revenue if the firm produces the allocatively efficient quantity. Show your work.(b) Starting at a price of $12, if GaterTools were to increase the price by 4%, will the quantity demanded decrease bymore than 4%, less than 4%, or exactly 4%? Explain.(c) At a quantity of 10 units, is GaterTools' marginal product increasing, decreasing, or constant? Explain. (f) Does GaterTools have a dominant strategy? Explain using numbers from the payoff matrix.(g) Identify the Nash equilibrium. Explain why this is a Nash equilibrium using information from the payoff matrix.(h) Suppose HandyBilt makes a credible commitment to GaterTools that if GaterTools maintains its price, then HandyBiltwill pay GaterTools $250. Will this offer…
Shakti Inc. has been granted a patent for its arnica toothache balm. The table to the right shows the demand and the total cost schedule for the firm. What is Shakti's profit minus maximizingoutput? A. 4 units B. 6 units C. 7 units D. 5 units Price per dose (Dollars) Quantity Demanded (Dose) Total Cost of Production (Dollars) $80 0 $80 72 1 82 64 2 88 56 3 100 48 4 124 40 5 164 32 6 208 24 7 268 16 8 340
Wilbur's is the only septic service in a remote village. The firm's total fixed cost is $125 a day and its marginal cost is zero. The table gives the demand schedule for service calls. Price (dollars per service call) 500 400 300 200 100 0 Quantity (service calls per day) 0 4 8 12 16 20 Draw the firm's demand curve. Label it D. Draw the firm's marginal revenue curve. Label it MR. Draw the firm's marginal cost curve. Label it MC. Draw a point at the profit-maximizing price and output. What is Wilbur's economic profit? Wilbur's economic profit is $ a day. >>> If the firm incurs an economic loss, indicate the loss with a minus sign. If the firm makes an economic profit, do not include a plus sign. C 600- 500- 400- 300- 200- 100- 0- Price and cost (dollars per service call) 20 8 12 16 Quantity (service calls per day) >>> Draw only the objects specified in the question 24 ( [
Use the following table and use your previous calculations: find the quantity where ATC is at a minimum and find the quantity that is the most efficient operating point for the firm. Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 30 and 40 Quantity ATC at minimum between 20 and 40 Quantity b. MC = ATC at 30 Quantity ATC at minimum between 20 and 40 Quantity c. MC = ATC at 40 Quantity ATC at minimum between 20 and 40 Quantity d. MC = ATC between 30 and 40 Quantity ATC at minimum between30 and 40 Quantity e. MC = ATC between 20 and 40 Quantity ATC at minimum between 20 and 40 Quantity
Table 15-4 Price per Dose $80 72 Quantity Demanded (dose) 0 1 2 3 4 5 6 24 7 16 8 Shakti Inc. has been granted a patent for its Arnica toothache balm. Table 15-4 shows the demand and the total cost schedule for the firm. 64 56 48 40 32 Total Cost of Production (dollars) $80 Refer to Table 15-4. What is the amount of Shakti's profit? $68 $72 $124 $192 82 88 100 124 164 208 268 340
The market for fertilizer is perfectly competitive.Firms in the market are producing output but arecurrently incurring economic losses.a. How does the price of fertilizer compare to theaverage total cost, the average variable cost, andthe marginal cost of producing fertilizer?b. Draw two graphs, side by side, illustrating thepresent situation for the typical firm and for themarket.c. Assuming there is no change in either demand orthe firms’ cost curves, explain what will happenin the long run to the price of fertilizer, marginalcost, average total cost, the quantity supplied byeach firm, and the total quantity supplied to themarket.
Suppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 80 Profit or Loss 70 ATC 60 50 40 20 AVC 20 MC 10 10 12 QUANT TY Thousands of pans per dey 140 45 32 PRICE (Dollars per pan) 品导
Suppose the graph depicts the marginal cost (MC) curves of two profit maximizing Texas cotton farmers, Jesse and Neal. Assume Jesse and Neal sell their cotton in the same competitive market. What is the most efficient way for Jesse and Neal to produce a total of 1200 bales of cotton? Jesse's optimal output: Neal's optimal output: 400 Incorrect 200 Incurrect bales bales Price and cost $10- 9- 8- 7- 6- MC MC 0 100 200 300 400 500 600 700 800 900 1000 Bales of cotton
7 A firm produces widgets in a highly competitive market. The current market price is $100 per widget. The firm's total and marginal cost curves are: TC = 3,000,000 + 0.001Q² MC = 0.002Q Calculate the firm's profit-maximizing quantity. a. b. What is the firm's profit or loss?
Wilbur's is the only septic service in a remote village. The firm's total fixed cost is $125 a day and marginal cost is zero. The table gives the demand schedule for service calls. Price (dollars per service call) 500 400 300 200 100 0 Quantity (service calls per day) 0 2 4 Draw the firm's demand curve. Label it D. Draw the firm's marginal revenue curve. Label it MR. Draw the firm's marginal cost curve. Label it MC. Draw a point at the profit-maximizing price and output. Wilbur's economic profit is $ a dav. 689 10