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1. Given the following information: Total Product (TP) Price 0 $6000 1 6000 2 6000 3 6000 4 6000 5 6000 6 6000 Fixed Cost (TFC) $4000 4000 4000 4000 4000 4000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity.

1. Given the following information: Total Product (TP) Price 0 $6000 1 6000 2 6000 3 6000 4 6000 5 6000 6 6000 Fixed Cost (TFC) $4000 4000 4000 4000 4000 4000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 6E
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1. Given the following information: Total Product (TP) 0 1 2 3 4 5 6 Price Fixed Cost (TFC) $6000 $4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? | b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity. d. What is the profit maximizing level of total product (TP) in this example? (3 points) e. At a quantity of 1, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? f. At a quantity of 2, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? g. At a quantity of 3, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? h. At a quantity of 4, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? i. At a quantity of 5, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? At a quantity of 6, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown?
Transcribed Image Text:1. Given the following information: Total Product (TP) 0 1 2 3 4 5 6 Price Fixed Cost (TFC) $6000 $4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? | b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity. d. What is the profit maximizing level of total product (TP) in this example? (3 points) e. At a quantity of 1, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? f. At a quantity of 2, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? g. At a quantity of 3, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? h. At a quantity of 4, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? i. At a quantity of 5, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? At a quantity of 6, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown?
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1. Given the following information: Total Product (TP) 0 1 2 3 4 5 6 Price Fixed Cost (TFC) $6000 $4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 6000 4000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? | b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity. d. What is the profit maximizing level of total product (TP) in this example? (3 points) e. At a quantity of 1, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? f. At a quantity of 2, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? g. At a quantity of 3, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? h. At a quantity of 4, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? i. At a quantity of 5, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? At a quantity of 6, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown?
Transcribed Image Text:1. Given the following information: Total Product (TP) 0 1 2 3 4 5 6 Price Fixed Cost (TFC) $6000 $4000 6000 4000 6000 4000 6000 4000 6000 4000 6000 6000 4000 4000 Variable Cost (TVC) $ 0 7000 10000 12000 16000 22000 33000 a. Based upon the numbers from the table above, is this firm is operating in the short-run or the long-run? How do you know which time period it is operating in? | b. Based upon the numbers from the table above, how do you know that this firm exemplifies a purely competitive firm? c. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue (MR) at every total product quantity. d. What is the profit maximizing level of total product (TP) in this example? (3 points) e. At a quantity of 1, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? f. At a quantity of 2, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? g. At a quantity of 3, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? h. At a quantity of 4, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? i. At a quantity of 5, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown? At a quantity of 6, will this firm produce or shutdown? Explain. How much of a profit or loss does the firm incur based upon their decision to produce or shutdown?
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