### Calculating total revenue-total cost and profit

Assignment Help Macroeconomics
##### Reference no: EM1311251

Perfect Competition

The following table represents the hourly output and cost structure for a local pizza shop. The market it perfectly competitive, and the market price of a pizza in the area is \$10. Total costs include all explicit and implicit costs.

 Output Total Costs 0 \$5.00 1 \$9.00 2 \$11.00 3 \$12.00 4 \$14.00 5 \$18.00 6 \$24.00 7 \$32.00 8 \$42.00 9 \$54.00 10 \$68.00

a) Calculate the total revenue and total economic profit at each level of output.

b) Calculate the pizza shop's marginal costs and marginal revenue level of output.  What is the profit maximizing rate of output for the pizza shop?

c) Draw a market supply and demand diagram for pizza along side a corresponding representative firm graph for the pizza shop. With respect to the representative firm graph, label the areas that represent total revenue, total costs, and profit. (For simplicity, only draw the average total cost curve; you need not draw the average variable cost curve.)

d) Now in another set of side by side graphs, show the adjustment that takes place in the long run in both the market graph and the corresponding graph for the representative firm. (Explain your answer.)

### Write a Review

#### Determining the law of supply

In article on the steel industry, The Wall Street Journal noted that as steel prices were falling, steelmakers were not cutting production

#### What is opportunity cost

What is opportunity cost? Explain with the help of an example, why assumption of constant opportunity cost is very unrealistic?  Explain law of demand with the help of a demand schedule and demand curve.

#### Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

#### Market imperfection associated with negative externalities

Essay on Market imperfection associated with negative externalities

#### Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

#### Government regulation and monopoly power

Why might the existing firms in a cartelized industry prefer to be regulated by the government? What is the problem with common property resources?

#### What is bill''s opportunity cost of producing one hat

What is Bill's opportunity cost of producing one hat, In which of the two activities does Mary have a comparative advantage.

#### Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

#### Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

#### Economic statements about purely competitive firms

Assume that a price support system for cotton requires the federal government to pay farmers \$3,000 for each acre to not plant cotton. How would you shift either the supply or demand curve for cotton to describe the effect of this action? In your a..

#### In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

#### Output and profit maximizing price for monopoly

What is the profit-maximizing price and output? What is the total profit? What is the price elasticity of demand at the profit maximizing output?