Many marginal cost curves are U-shaped. Consequently, the MC curve can equal price at two output levels.

Question:

Many marginal cost curves are U-shaped. Consequently, the MC curve can equal price at two output levels. Which is the profit-maximizing output? Why?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics Theory and Applications with Calculus

ISBN: 978-0133019933

3rd edition

Authors: Jeffrey M. Perloff

See More Books

Question Posted: Dec 29, 2017 12:53 AM

See More Questions

Many marginal cost curves are U-shaped. As a result, it is possible that the MC curve hits the demand or price line at two output levels. Which is the profit- maximizing output? Why?
The Heritage Club at Harbor Town offers elegant accommodations for discriminating vacationers on Hilton Head Island, South Carolina. Like many vacation resorts, Heritage Club has discovered the...
A: Suppose further that both technologies take capital k and labor as inputs but that the patented technology is more capital intensive. (a) Draw two isoquants, one from the technology representing...
Find all conjugates in C of the given number over the given field. 1+2 over Q
Butane is burned with 200% theoretical air, and the products of combustion, an equilibrium mixture containing only CO2, H2O, O2, N2, NO, and NO2, exit from the combustion chamber at 1400 K, 2 MPa....
Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows. Additional production information for two models of its air page 691 conditioners...
At present, 10-year Treasury bonds are yielding 5 percent, while a 10-year corporate bond is yielding 7 percent. If the liquidity-risk premium on the corporate bond is 0.5 percent, what is the...
Lexi Company forecasts unit sales of 1,040,000 in April, 1,220,000 in May, 980,000 in June, and 1,020,000 in July. Beginning inventory on April 1 is 280,000 units, and the company wants to have 30%...
1 2 34 What is "SWOT analysis? How do you carry it for a technical educationalinstitute? What is corporate planning? Explain the process of corporate planning? Discuss the process of strategy...
Under the decimal system of computing time worked at Timmerman Company, production workers who are tardy are "docked" according to the schedule shown below. Minutes Late in Ringing inFractional Hour...
A Christmas tree seller has a cost function C = 6,860 + (pT + t + 7/12)q + 37/27,000,000q3, where pT = $11.50 is the wholesale price of each tree and t = $2.00 is the shipping price per tree. What is...
Each of the 10 firms in a competitive market has a cost function of C = 25 + q2. The market demand function is Q = 120 - p. Determine the equilibrium price, quantity per firm, and market quantity?
Use the rational zeros theorem and the equation x4 - 12 = 0 to show that 4(12 is irrational?
Question 2: Marking CDS trades to Market (30 marks) a) An investor buys protection on ABC Corp 5y CDS with a Par Spread of 300bp on a full running spread convention, the risky annuity at inception is...
Green Scenery Company provides landscape services and operated based on customer order. The company uses normal costing, and the overhead allocation base is direct labour costs. On 1st May, the...
program using the c language and Unix/Linux to demonstrate your understanding of the Unix system calls for creating and synchronizing processes. The program must display your last name and then your...
11: 12: 13: 14: 15: 16: Question 2: MIPS 5-stage Pipeline (35 pts) For this question, your first task is to write the MIPS instructions based on the provided machine codes. You may assume the first...
Flag Faber Manufacturing inc of st paul purchases 9,649 top of the line semiconductor; the maximum backordering quantity in units 502; lead time = 1.5 month ( the firm operates 12 months per year)....
Verify that the given function y is a solution of the initial value problem that follows it. y = 16e 2t - 10; y'(t) - 2y = 20, y(0) = 6
An item of depreciable machinery was acquired on 1 July 2009 for $120,000 by cash It is expected to have a useful life of 10 years and zero salvage value On 1 July 2012, it was decided to revalue the...
A monopolists inverse demand function is p = 100 2Q, so its marginal revenue is MR = 100 4Q. Its cost function is C = 25 + 4Q + 2Q 2 and its marginal cost is therefore MC = 4 + 4Q. a. Create a...
Spam imposes significant negative externalities on e-mail users (see the Mini-Case, Spam). If a small charge were applied to every e-mail message, would the extent and impact of this negative...
Austin, who is going on holiday, sits in a first-class airline seat holding his infant daughter in his arms. He values being in first class instead of coach at $300. A CEO, who sits in the adjacent...
Details of the capital structure of Webber Ltd. appear below: Bonds Number issued Coupon rate Interest payments Years to maturity 27,000 6% semi-annually 10 $90 Current price Preferred shares Number...
An Ice cream company has commissioned an ice sculpture for their end of year celebration. The ice sculpture is in the shape of a giant ice cream cone-the shape can be thought of as a cone with one...
1. A soft drink vendor at a popular beach resort analyzes his sales records and finds that if he seels x cans of pop in one day, his profit in dollars is given by the function P(x) = -0.012+3x-80....

Many marginal cost curves are U-shaped. Consequently, the MC curve can equal price at two output levels.

Question:

Step by Step Answer:

Suppose that a Ushaped marginal cost curve cuts a competitive firms demand ...View the full answer

Microeconomics Theory and Applications with Calculus

Students also viewed these Economics questions