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Submitted by Drummond, Craig (CHD5082) on 2/10/2017 3:45:35 PMPoints Awarded97.75Points Missed2.25Percentage97.8%1.SCENARIO B: Suppose that due to favorable economic conditions, the price that this firm can sell its product for rises to $22.For question 1. Fill in Table B - Each box is worth ½ point for a total of 9 points for Table BTABLE B- The wage is still $150 and the price of output (Q) is now $22.LQMPLMRPMarginal ProfitTotal Profit00---------------------0188$$$22012$$$3288$$$4357$$$5416$$$6454$$$Table for Individual Question FeedbackPoints Earned:9.0/9.0
Box 14: -18;Box 15: 152;Box 16: 88;Box 17: -62;Box 18: 902.Use Scenario B/Table B to answer the questions 2 – 4 below.(3 points) The profit maximizing output (Q) is .Table for Individual Question FeedbackPoints Earned:3.0/3.03.
(3 points) The profit maximizing level of labor (L) input is workers.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):44.(3 points) The maximum profit for this firm is .Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):1705.DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs.(2 points) Using Scenario B/Table B, go to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B.Table for Individual Question FeedbackPoints Earned:2.0/2.0Correct Answer(s):
(3 points) Using Scenario B/Table B, go to Graph 2 and draw this firm’s newMRP curve (remember that MRP = P* MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B.Table for Individual Question FeedbackPoints Earned:3.0/3.0
(3 points) Using Scenario B/Table B, draw this firm’s Supply curve on Graph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was $20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to $22, and the profit maximizing Q youfound in your answer for #2 above). Connect the two points and label your supply curve.