Just 1 and 2 please. QuantityTotal Cost Output 20 30 40 50 S50 $85 $150 $220 $30
ID: 1158239 • Letter: J
Question
Just 1 and 2 please.
QuantityTotal Cost Output 20 30 40 50 S50 $85 $150 $220 $305 $455 Consider the table above for a perfectly competitive firm, if the market price is $8.50, what are the profit-maximizing output and profit? a. Output 40; Profit $35 b. Output- 40; Profit $0 Output -0; Profit--$50 Output and profit cannot be determined because marginal revenue cannot be calculated with the information givern Does the table above represent a long-run or a short-run situation? a. Long run because there are no fixed cost Short run because there is no equilibrium Short run because there are fixed cost Long run because there is a normal profit Farmer Fanny sells her crops in a perfectly competitive market. If she produces 500 bushels for total revenue of $3,000 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,510, her a. Revenue will increase by $4 if she harvests the 501st bushel Average fixed cost will rise if she harvests the 501t bushel c. Profit will fall by $10 if she harvests the 501s bushel d. Profit will fall by $4 if she harvests the 501st bushel The Hound Dog Bus Company contemplates expanding its Virginia operations by offering service from Fairfax to Arlington. The total cost of the trip would be $120, of which $50 is fixed cost, which it has already paid. The firm expects to earn $60 in revenue from the trip. The Hound Dog Bus Company should a. Offer this service because it will earn a positive economic profit Not offer this service because the total revenue is less than the variable costs Offer this service because the revenue exceeds fixed cost Not offer this service because the total cost exceeds the total revenueExplanation / Answer
1. In a perfectly competitive firm, the profit-maximizing point is the point where the price equals the marginal revenue. Since here we don't have the marginal revenue and neither can it be calculated with the given information, output and profit cannot be determined with the given information. Hence the correct answer is (D).
2. The table above represents a short run situation because there exists a fixed cost. In the long run, there are no fixed costs as everything is variable. Hence the correct answer is (C).
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