Project #77765 - Economics

Chapter 9, Problem 3

You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $500,000 per month, and you have contractual labor obligations of 1 MILLION PER MONTH  that you can’t get out of. You also have a marginal printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper. If sales fall by 20 percent from 1 million papers per month to $800,000 papers per month, what happens to the AFC per paper, the MC per paper, and the minimum  amount that you must charge to break even on these costs?

Chapter 10, Problem 4

Assume that the cost data in the following table are for purely competitive producer:

Total Product

Average Fixed Cost

Average Variable Cost

Average Total Cost

Marginal

Cost

0

 

 

 

 

1

$60

$45.00

$105.00

$45.00

2

30.00

42.50

72.50

40

3

20.00

40.00

60.00

35

4

15.00

37.50

52.50

30

5

12.00

37.00

49.00

35

6

10.00

37.50

47.50

40

7

8.57

38.57

47.14

45

8

7.50

40.63

48.13

55

9

6.67

43.33

50.00

65

10

6.00

46.50

52.50

75

 

A-At  a product price of $56, will this firm produce in the short run? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? What economic profit or loss will the firm realize per unit of output?

B-Answer the questions of 4a assuming product price is $41.

C-Answer the questions of 4a assuming product price is $32.

D- In the table below, complete the short –run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3).

 

 

 

 

1

Price

2

Quantity Supplied Single Firm

3

Profit (+)

Loss(-)

4

Quantity Supplied

1,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E-Now presume that there are 1,500 identical firms in this competitive industry; that is, there are 1,500 firms, each of which has the cost data shown in the table.  Complete the industry supply schedule (column 4)

F-Suppose the market demand data for the product are as follows:

Price

Total Qunanity Demanded

$26

17,000

32

15,000

38

13,500

41

12,000

46

10,500

56

9,500

66

8,000

 

What will be the equilibrium price? What will be the equilibrium output for the industry? For each firm? What will profit or loss be per unit? Per firm? Will this industry expand or contract in the long run?

Chapter 11, Problem 2

 

A firm in a purely competitive industry is currently producing 1,000 units per day at a  total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firm’s ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? Rom what you know about these firms’ cost structures, what is the highest possible per unit could exist as the market price in long-run equilibrium? If that price ends up being the market price and the normal rate of profit is 10 percent, ten how will each firms’ accounting profit per unit be?

 

 

All submitted written work should include your name, the course number, and the title of the problem set. In addition, remember that all conclusions must be supported. You should show the steps you took to arrive at your conclusion. Numbers and calculations are not self-explanatory. Your assignment should be "in good and proper form" when submitted. That means, for example, when you prepare economic information, your numbers must be aligned on the decimal and right justified. Use commas for thousands. Use underlines and dollar signs appropriately. Every answer must be properly labeled and supported with calculations in statement or schedule (table) form, as you would do in a professional setting. Do not type formulas, equations, and calculations or show math or equal signs. 

When finished, submit your completed problems in one file (Word or Excel) for grading and instructor feedback. 
Word file: The cover page must include your name, course, date, unit and assignment numbers, and problem number. Each problem must begin on a new page with a hard page-break. If you use Word to prepare calculations, prepare them in table form as if it were in Excel. Do not write anything past the margins. 

Excel file: The first tab is the cover page and must include your name, course, date, and the unit and assignment number. Each problem must be numb on a separate tab. Each tab must be properly labeled. Note that Excel is not actually required, but if you use Excel, you must use it correctly: one number in one cell, and each number (cell) properly labeled. Do not type formulas; instead, you must use Excel functions to calculate. Do not write anything past the margins. Use landscape page orientation if necessary. 

Subject Business
Due By (Pacific Time) 07/31/2015 12:00 am
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