Assume chan is a perfectly competitive firm which produces

Reference no: EM13378808

Assume Chan. is a perfectly competitive firm, which produces baseball bats. Chanmpany seeks to maximize profits and uses the MR=MC RULE to find its profit maximizing (or loss minimizing) level of output. Total fixed costs (TFC) for Chan. are $235 and you have the following additional cost information.

output (Q) Total Costs (TC) Marginal Cost (MC)

0 $235 --

1 $300

2 $355

3 $405

4 $452

5 $500

6 $552

7 $610

8 $680

9 $760

10 $860

11 $990

12 $1,150

a. Fill in the column for MC to complete the table above.

b. Suppose that price is $130.

i) What is the profit maximizing (loss minimizing) level of output for Chan in the SR?

ii) Calculate the total economic profit (or loss) that Chan. would receive at this particular level of output. You must show all of your work to receive full credit

iii) Should this firm continue to produce or should it shut down in the short run? Why?

c. Assume instead that price is $70.

i) What is the profit maximizing (loss minimizing) level of output for Chan in the SR?

ii) Calculate the total economic profit (or loss) that Chan. would receive at this particular level of output. You must show all of your work to receive full credit

iii) Should this firm continue to produce or should it shut down in the short run? Why?

Reference no: EM13378808

Questions Cloud

A firm sells its product in a perfectly competitive market : a firm sells its product in a perfectly competitive market where other firms charge a price of 130 per unit. the firms

Discuss the different economic theories of milton friedman : discuss the different economic theories of milton friedman. why was he important? has he helped or hurt our economy? if

A firm has 1100000 in sales a lerner index of 062 and a : a firm has 1100000 in sales a lerner index of 0.62 and a marginal cost of 55 and competes against 1000 other firms in

Suppose the own price elasticity of market demand for : suppose the own price elasticity of market demand for retail gasoline is -0.8 the rothschild index is 0.7 and a typical

Assume chan is a perfectly competitive firm which produces : assume chan. is a perfectly competitive firm which produces baseball bats. chanmpany seeks to maximize profits and

You make some very interesting observations in your : you make some very interesting observations in your analysis on the process performance at d2d.supply chain for many

1 you have to identified minimum 30 uncontrolled hazards : 1. you have to identified minimum 30 uncontrolled hazards and 2 good practices.2. while writing uncontrolled hazards in

Suppose that the trade pattern of a country is that it : suppose that the trade pattern of a country is that it exports foodstuffs and imports fancy sports equipment. can you

Susan is considering buying a 2011 smart fortwo costing : susan is considering buying a 2011 smart fortwo costing 21635 and finds that the retaining values of the vehicle over

User Account

All Pages