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Aleks [24]
2 years ago
9

Assume that the short-run cost and demand data given in the tables below confront a monopolistic competitor selling a given prod

uct and engaged in a given amount of product promotion.
Output Total Cost Marginal Cost Quantity Demanded Price Marginal Revenue
0 25 0 0 60 0
1 40 15 1 55 55
2 45 5 2 50 45
3 55 10 3 45 35
4 70 15 4 40 25
5 90 20 5 35 15
6 115 25 6 30 5
7 145 30 7 25 -5
8 180 35 8 20 -15
9 220 40 9 15 -25
10 265 45 10 10 -35

If the firm sells 3 units of output, marginal revenue will be _____.
Business
1 answer:
REY [17]2 years ago
4 0

Profit is maximized when Q = 4 and P = $40, with maximum profit = $90.

<u>Explanation:</u>

(a)  (i) Marginal cost (MC) = Change in Total cost (TC) by Change in output (Q)

(ii) Total revenue (TR) = Price (P) into Q

(iii) Marginal revenue (MR) = Change in TR by Change in Q

(iv) Profit = TR - TC

Therefore:

Q  TC  MC  P  TR  MR  PROFIT

0  25   60  0   -25

1  40  15  55  55  55  15

2  45  5  50  100  45  55

3  55  10  45  135  35  80

4  70  15  40  160  25  90

5  90  20  35  175  15  85

6  115  25  30  180  5  65

7  145  30  25  175  -5  30

8  180  35  20  160  -15  -20

9  220 40  15  135  -25  -85

10  265 45  10  100  -35  -165

When Q = 4, MR = $25 and MC = $15, so MR > MC. When Q = 5, MR = $15 and MC = $20, so MR < MC. Therefore,  

Profit is maximized when Q = 4 and P = $40, with maximum profit = $90.

(b)  In the long run, new firms will enter the market by being attracted by positive short run profit. Therefore in long run, demand for individual firm will decrease, price for individual firm will decrease and profit will decrease until each existing firm earns zero economic profit.

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Answer:

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3 0
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Answer: Please refer to Explanation

Explanation:

First an explanation of the terms.

Recession - A Recession refers to successive Quarters seeing a reduction in economic activity or negative Economic growth. On the business cycle, it is the area between the Peak and the Trough.

Recovery - This is the period in the business cycle where the Economy is rising and Economic growth is starting to be positive. It shows Increased business activity and is the area between the Trough and the Peak after the cycle leaves the Trough.

Classification.

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Falling demand for products - CAUSES OF RECESSION

As just mentioned, when there is a falling Demand for products, suppliers will respond by producing less goods. When this happens, there will be a reduction in Economic activities which is a Recession if the trend continues for a period of time.

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As more employers hire more people it signifies 2 things. One is that the company is now producing more which leads to more economic activity. Two is that with more people employed, more people have money and as such can buy more goods and services which means increased demand. This will help the Economy recover.

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Answer:

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Explanation:

Substitution bias occurs when a customer decides to purchase a substitute of a good after the prices becomes cheaper than the goods they normally purchase. It rises as a problem in price index due to the fact that customers/buyers can decide to change or substitute goods at an instant because of changes in prices. In situations like this, customers tend to avoid the whole increase in prices by changing to cheaper substitutes. Substitution generally is a consumer changing or substituting an expensive product for a cheaper one due to changes in prices. This usually leads to inflation rate been overestimated or overstated.

4 0
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Identify the marketing research technique implied in the scenario. Tiara is planning to open a small café in her neighborhood. H
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5 0
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The market demand curve for a normal good will shift to the left ​(decrease​) when the price of a substitute good ▼ increases de
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1. decreases 
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1. The price of a substitute good â–Ľ increases decreases​ 
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2. The price of a complementary good ▼ decreases increases​,
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