Problem 1: At the end of the year, a firm produced 18,000 lab top computers. Its total costs were $8 million , and its fixed costs were $5 million. what are the avg. variable costs of this firm?
Problem 2: The cost structure of a manufacture of microchips is described in the table shown below . The firm fixed costs equal $15,000 per day. Calculate the average variable cost, average fixed cost, and avg. total cost at each output level.
output (microchip per day) total cost of output avg. variable cost($) avg.fixed cost ($) avg. total cost ($)
0 15,000 -------- ------------ ----------------
15,000 65,000
40,000 100,000
65,000 155,000
90,000 225,000
115,000 330,000
140,000 470,000
Problem 3: The table below represents the hourly output and cost structure for a local pizza shop. The market is perfectly competitive, and the market price of a pizza In the area is $10. Total costs include all implicit opportunity cost. Calculate the pizza shop's marginal revenue at each rate of output and fill in the values in the table.
total hourly output & sales of pizzas total hourly cost($) TR ($) total economic profit ($) MC ($) MR ($)
0 3 0 0 ------ -------
1 7 10 3
2 9 20 11
3 10 30 20
4 12 40 28
5 16 50 34
6 22 60 38
7 30 70 40
8 40 80 40
9 52 90 38
Problem 4: The campus barber faces stiff completion from the large number of shops that surround the campus area, and for all practical purposes the market is perfectly competitive. He charges $10 for a haircuts hair for 18 people a day. His shop is open 5 days a week. Calculate his weekly total revenue.
Problem 5: Given the information in the table @ the right ,Calculate the dry cleaner's marginal revenue (MR) & marginal cost @ each output level.
output suites cleaned price per suit ($) TC ($) TR($) MC($) MR($)
0 8.00 3.00 0.00 ------ -------
1 7.50 6.00 7.50
2 7.00 8.50 14.00
3 6.50 10.50 10.50
4 6.00 16.50 24.00
5 5.50 13.50 27.50
6 5.00 16.00 30.00
7 4.50 19.00 31.50
8 4.00 24.00 32.00
Problem 6: Currently, a monopolist's profit-maximizing output is 300 unit per week. It sells its output @ a price of $55 per unit and collect $35 per unit in revenues from the sale of the last unit produced each week. The firm's total costs each week are?--------
Problem 7: The following table shows demand a d marginal cost for a monopolist. Calculate marginal revenue at each quantity.
output (units) price per unit marginal revenue marginal cost
0 56 ---- -------
1 45 10
2 35 20
3 25 30
4 15 40
5 5 50
Problem 8: Suppose that a perfectly competitive firm faces a market price of $7 per unit and @ this price the upward-sloping portion of the firms marginal cost curve crosses its marginal revenue curve at an output level of 1,400 units, its average variable costs equal $6.50 per unit , and its average fixed cost equal $0.80 per unit. What is the firm's profit-maximizing (or loss minimizing) output level? (include minus sign if necessary.)
Problem 9: The following table shows marginal and avg. total cost schedules for a perfectly competitive firm. Currently, the market price in this industry is $40. output (units) marginal cost avg. total cost
0 -------- --------
1 10 35
2 20 28
3 30 18
4 40 31
5 50 35
A profit - maximizing firm will produce ------- units
Problem 10: Currently, a monopolist's profit- maximizing output is 250 units per week. It sells its output @ a price of$70 per unit and collects $40 per unit in revenues from the sale of the last unit produced each week. The firms total costs each week are &8,500. Given this information, the firm's maximized weekly economic profits are $______________.
Problem 11: Suppose that the distribution of sales within an industry is as shown in the following table:
Firm share of total market sales
A 17
B 12
C 13
D 10
E 10
F 10
G 8
H 7
all others 13
total 100%
There are 13 " all other" in the industry in the above table, each of which has a share of sales equal to 1%. The value of the Herfindahl- Hirschman index for this industry is --------------.
Problem 12: Suppose that the distribution of sales within an industry is as shown in the table. What is the four -firm concentration ratio for this industry? firm share of total market sales
A 16
B 15
C 14
D 12
E 9
F 7
G 5
H 4
all other 18
total 100%