Is this firm making the profit-maximizing decision

Assignment Help Business Economics
Reference no: EM131167307

In yet another competitive industry, the market-determined price is $10. For a firm currently producing 250 units of output, short-run marginal cost is $7, average total cost is $39, and the average variable cost is $9. This firm incurs total quasi-fixed costs of $2,500, thus average quasi-fixed cost is $10 per unit. Is this firm making the profit-maximizing decision? Why or why not? If not, what should the firm do? (Hint: You will need to compute total avoidable cost.)

Reference no: EM131167307

Questions Cloud

In different competitive market : In a different competitive market, the market-determined price is $80. For a firm currently producing 1,000 units of output, short-run marginal cost is $100, average total cost is $100, and average variable cost is $75. Is this firm making the profit..
Develop a decision tree to maximize ventrons emv : Develop a decision tree to maximize Ventron's EMV.- What value of side benefits would make Ventron indifferent between the two alternatives?
Assembles electric toasters using labor and robots : Consider a company that assembles electric toasters using labor and robots. Suppose that in 1950, robots were so crude that they were useless in the assembly of toasters, so that toasters had to be assembled entirely by hand. Now suppose that as a re..
What is the effect of a marginal change : Show that the firm's short-run demand for labor as a function of the fixed level of capital K > 0 satisfies L(K) = 25K. What is the effect of a marginal change in K on the profit of the firm
Is this firm making the profit-maximizing decision : In yet another competitive industry, the market-determined price is $10. For a firm currently producing 250 units of output, short-run marginal cost is $7, average total cost is $39, and the average variable cost is $9. This firm incurs total quasi-f..
Calculate the effect of a marginal increase : Consider a perfectly competitive market in which the government can impose a per-unit tax t ≥ 0. Calculate the effect of a marginal increase in t on the profit that each firm makes in equilibrium
Mean-variance analysis or coefficient of variation analysis : How would you go about estimating the different probabilities of three alternatives occurring if you have little empirical data on which to base your estimates? Using either expected value rule, mean-variance analysis, or coefficient of variation ana..
How much should he be willing to pay for such a contract : Use a decision tree to find the investor's optimal strategy, assuming he purchases the contract. - How much should he be willing to pay for such a contract?
Which type of muscle tissue has cells that branch : Which type of muscle tissue has cells that branch? Hypertrophy of skeletal muscles from weight lifting is caused by an increase in the. When an action potential reaches the presynaptic terminal.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd