Question: Question Four (25 points) a) What should a firm do if it realizes that its marginal revenue 15 more than its marginal cost? points b)

Question Four (25 points) a) What should a firm do if it realizes that its marginal revenue 15 more than its marginal cost? points b) What should a firm do if it realizes that its average cost 15 more than its average revenue in the short run? (8 points c) Explain the difference between economic profits and accounting profits. Support your answer with example. (9 points)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

On January 1, 2014, a U.S. company purchased 100% of the outstanding stock of Ventana Grains, a company located in Latz City, New Zealand. Ventana Grains was organized on January 1, 2000. All the...

Question1 When a monopoly increases its output and sales, what is the impact of the output effect and the price effect on total revenue? Select one: a.Both the output effect and the price effect work...

a) What should a firm do if it realizes that its marginal revenue is more than its marginal cost? (8 points) b) What should a firm do if it realizes that its average cost is more than its average...

3. Profit maximization using total cost and total revenue curves Suppose Lorenzo runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a price-taker market,...

a)What should a firm do if it realizes that its marginal revenue is more than its marginal cost?(8 points) b)What should a firm do if it realizes that its average cost is more than its average...

Assume a firm faces a demand curve equal to Qp = 1,200-4P where P is the price per unit and Qo is the number of units. The firm has a variable cost equal to $15 per unit produced, which is also the...

plz give me answer according to a final exam paper. thanks Q.No.4: Consider total cost and total revenue given in the following table: Quantity Total cost 10 Total Revenue 1. Calculate profit for...

E > G bb-gbc.blackboard.com U + M Your one-time code - fal. Content Take Test: Final cxan-A... C A Large Law Firm Uses A. C A Hardware Store Operat. C Time Period Demand 7 Y... C Operations...

Increase Question 33 (2 points) The graph below shows the short-run cost curves and three possible marginal revenue curves for a perfectly competitive firm. If the firm were facing MRI, then we know...

deli Question Three (25 points) 5 Define and explain the main features and the differencus between accounting profit and economic profit. Also, provide the meaning of normal profits. Question Four...

QUESTION 6 2.5 points Saved Assume that the coefficient of elasticity of product demand is 1.5 in industry A and is .75 in industry B. Other things equal, labor demand will be more elastic in...

If we generalize this binomial expansion to any n-th power of (r+y), then we get, -(1)-. (a+y)" => which is called "binomial theorem." Problem 1 (4 Points) As an exercise, apply the binomial theorem...

US Company recently issued 250M of five-year fixed rate debt at 4% p.a. US Co. will pay interest annually for each of the next five years. Swap Bank is posting five- year /$ swap rates of...

Flynn acquires 1 0 0 \ % of the outstanding shares of Macek Co . on Jan 1 . , 2 0 1 3 . To obtain these years, Flynn pays \ ( \ $ 4 0 0 \ ) cash ( in thousands ) and issues 1 0 , 0 0 0 shares of \ (...

(1) Prompt the user to input an integer, a double, a character, and a string, storing each into separate variables. Then, output those four values on a single line separated by a space. Note: This...

A uniform spherical charge distribution has a total charge of 45.3 mC and a radius of 15.2 cm. It is surrounded by a thin spherical shell with a uniform charge distribution. The uniform shells net...

Your firm's bank has offered you two options for short-term financing in the amount of $400,000. The first option is a committed line of credit with a commitment fee of 0.5% (EAR) and an interest...

A. Navigate to the threaded discussion below: B. Imagine that you have invested $1 million in a McDonalds franchise restaurant. The investment includes expenses for land, buildings, and franchise...

Additional analysis 1) Journal entry needed WIP- Forming WIP-Blending 2) Total cost per unit: Blending DM 3) 4) Inventory Analysis WIP Inventory- Blending WIP Inventory Forming Finished Goods...

Sam Hutchins is planning to operate a specialty bagel sandwich kiosk but is undecided about whether to locate in the downtown shopping plaza or in a suburban shopping mall. Based on the following...

9. How much of the information collected will be used in decision-making?

1. Background knowledge of the subject and

4. What specific changes in the environment have taken place in relation to the information we have collected?