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- 1.i) Assuming you are the managing director of a firm that produces goods: A,B and C .The price elasticity of demand for A is 1.2, for B it is 1.oo and C is 0.75. It is known that he's firm is experiencing serious cash flow problems and you have to increase total revenue as soon as possible. If you were in a position to set the prices for these goods, what would be your pricing strategy for each product ii) price falls from N$ 16 to N$ 12 per bottle and demand rises from 200 to 300 per bottle.calculate the PED using midpoint formula Output prices average (total)cost Total cost marginal cost Total profit/loss 10 10 -108 20 10 4 -48 30 10 5 3 40 10 6.20 40 50 10 8 60 60 10 10 60 2. i) fill in the gaps ii)in which market structure doess Johnson Electronics (Pty)Ltd operate? iii)what level of output maximizes the firms profit2. Firm A makes and sells motor cycles. The total cost of each cycle is the sum of the costs of frames, assembly and engine. The firm produces its own engines according to the cost equation C₁=250,000 + 1,000Q +5Q² The cost of frames and assembly is $2,000 per cycle. Monthly demand for cycles is given by the inverse demand equation: P = 10,000-30Q Calculate the MC of producing an additional engine.The following graph plots daily cost curves for a firm operating in the competitive market for fitness trackers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE(Dollars pertracker) 100 90 70 60 50 40 20 10 0 0 MO ATC AVC 50 60 70 80 10 20 30 40 QUANTITY (Thousands of trackers per day) 90 100 Profit or Loss In the short run, given a market price equal to $45 per tracker, the firm should produce a daily quantity of trackers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.
- Suppose you are in charge to analyze the future price trend of a brand. What do you suggest about the price? What should be the change in it in future for market equilibrium if it is currently at P1 and also explain whether there is a surplus or a shortage in this current market?Elixir Spring's mineral water is unique and highly prized. The firm's total fixed cost is $4,000 a day and its marginal cost is zero. The table shows the market demand schedule for the firm's water. Compare Elixir's profit-maximizing price with the marginal cost of producing the profit-maximizing output. At the profit-maximizing price, is the demand for Elixir's water inelastic or elastic? Elixir's profit-maximizing price Elixir's marginal cost. A. is greater than B. is less than C. equals At the profit-maximizing price, the demand for Elixir's water is A. inelastic B. elastic C. perfectly inelastic D. unit elastic E. perfectly elasticAttempts 0 2. Calculating marginal revenue from a linear demand curve The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 160 140 120 100 A Demand 40 12 PRICE (Dollars per unit) 200 Keep the Highest 0/5 180 20 0 0 4 16 20 24 28 32 36 40 QUANTITY (Units) Graph Input Tool Market for Goods I Quanded (Units) Demand Price (Dollars per unit) 20 100.00 (?
- What two lines on a cost curve diagram intersect at the shutdown point?Inverse demand for backpack is P = 1600-50Q, Q is the total market output and P is the price. Firm Apple and Firm Banana has complete control of the supply and have Apple's Total cost function is TC = 100q(a)+1000, and Firm Banana has total cost function of TC =100q(b)+1000. Show your steps. 1. Calculate the quantity of backpacks produced by firm A and B. 2. Calculate P, the market price for backpacks.الوقت المتبقي 5 4:5 4 $16 MC $12 $11 ATC AVC $9 MR =D $6 $3 Quantity (clocks per months) 40 75 90 100 120 Refer to the above graph, answer the next questions if market price is $9: What output level should the firm produce to maximize profi? What is the break-even output? What is the shutdown price? What is the shutdown point? What is the firm supply curve ? A What is the firm maximum profit?
- Use the graph below to estimate the firm's approximate short run economic profit (assuming the firm maximizes profit). 7 MC АТC AVC MR 1 1 2 Quantity -1 -1.1 -1.2 PriceThe graph below plots the firm's total revenue curve: that is, the relationship between quantity and total revenue given by the two right columns in the table above. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. 90 81 72 63 54 В D 45 36 27 18 A E 100 200 300 400 500 600 700 800 QUANTITY (Dishwashers per year) TOTAL REVENUE (Thousands of dollars per year)The following figure shows the total cost and total revenue for a firm when it prices its products at $8 and $10. Price 0 1. OA 2. OC 3. OF 4. OG H F E JG TC TRO (P=$10) TR1 (P=$8) Output At a price of $10, the profit maximizing level of output for the firm is
