Customer Service Chat
Get quote & make Payment
PERFECT COMPETITION and THE SUPPLY CURVE & MONOPOLY, Microeconomics
Joe Brown’s dairy operates in a perfectly competitive marketplace. Joe’s machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages paid to the few workers he employs at the dairy and the grain he feeds to his dairy cows.
The variable cost associated with each level of output is given in the accompanying table.
Gallons of Milk Variable Cost
1000 $ 2,100
2000 $ 2,200
3000 $ 2,900
4000 $ 3,680
5000 $ 5,180
a. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output.
Gallons of Milk FC VC TC MC AVC ATC
0 $500 - - - -
1000 500 $ 2,100 2600 2.10 26.00
2000 500 $ 2,200 2700 2.70 1.35 27.00
3000 500 $ 2,900 3400 1.70 1.13 11.30
4000 500 $ 3,680 4180 1.39 .92 10.45
5000 500 $ 5,180 5680 1.42 1.13 11.36
b. What is the break-even price?
c. What is the shut-down price?
d. Suppose that the price at which Joe can sell milk is $3 per gallon. In the short run, will Joe earn a profit?
e. In the short run, should he produce or shut down?
f. Now suppose that the price at which Joe can milk is $1.50 per gallon. In the short run, will Joe earn a profit?
g. In the short run, should he produce or shut down?
h. Finally, Suppose that the price at which Joe can sell milk is $0.50 per gallon. In the short run, will Joe earn a profit?
i. In the short run, should he produce or shut down?
Posted Date: 8/19/2012 3:25:45 PM | Location : United States
Ask an Expert
PERFECT COMPETITION and THE SUPPLY CURVE & MONOPOLY, Assignment Help, Ask Question on PERFECT COMPETITION and THE SUPPLY CURVE & MONOPOLY, Get Answer, Expert's Help, PERFECT COMPETITION and THE SUPPLY CURVE & MONOPOLY Discussions
Write discussion on PERFECT COMPETITION and THE SUPPLY CURVE & MONOPOLY
Your posts are moderated
Write your message here..
Determine household production from the national accounts, What have been s...
What have been some justifications given for the historical exclusion of household production from the national accounts? Some reasons have included: a. households are not p
Profit maximization, Profits University creates student credit hours (y) wi...
Profits University creates student credit hours (y) with two inputs: Professors' hours of work (x1) and TAs' hours of work (x2) according to the manufacture function: f(x1,x2)= 10x
Workers'' co-operative, Workers' Co-operative: Another form of privat...
Workers' Co-operative: Another form of privatisation is transfer ofownership of a loss-making concern to the workers. Mr. R. Ganpati, formerChairman of the Board of Industria
Marginal Value Product, how do I find the marginal value product?
how do I find the marginal value product?
Return on equity and sales tax, Return on Equity: It's a measure of busine...
Return on Equity: It's a measure of business profitability equal to net after-tax income divided by average level of shareholders' equity in the business. Sales Tax: A tax im
Economics, List four characteristics of monopolistic competition
List four characteristics of monopolistic competition
How might governments use buffer stocks to stabilise prices, How might gove...
How might governments use buffer stocks to stabilise prices? Explain/outline a buffer stock scheme in brief as a method for government (in this case) to warehouse (stock) goods
Roger, What would be a factor that would make the prospects hopeful for ove...
What would be a factor that would make the prospects hopeful for overcoming the demand for resources in the future
Describe one case that fits the story of prisoner dilemma, Describe one cas...
Describe one case that fits the story of Prisoner Dilemma in not more than 10 sentences. It should fit the following features and it should not be any of the examples we already ta
Describing risk, Describing Risk * To measure risk we should know: ...
Describing Risk * To measure risk we should know: 1) All the outcomes which are possible. 2) The probability that each outcome will occur. * Interpreting Probability
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
Why Us ?
~24x7 hrs Support
~Quality of Work
~Time on Delivery
~Privacy of Work
Human Resource Management
Literature Review Writing Help
Terms & Conditions
Copyright by ExpertsMind IT Educational Pvt. Ltd.