Ch. 9 end problems

Ch. 9 End Problems
Download Document
Showing pages : 1 - 3 of 7
This preview has blurred sections. Sign up to view the full version! View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: >> Perfect Competition and the Supply Curve chapter 9 1. For each of the following, is the business a price-taking producer? Explain your answers. a. A cappuccino caf in a university town where there are dozens of very similar cappucci- no cafs b. The makers of Pepsi-Cola c. One of many sellers of zucchini at a local farmers market 2. For each of the following, is the industry perfectly competitive? Referring to market share, standardization of the product, and/or free entry and exit, explain your answers. a. Aspirin b. Shania Twain concerts c. SUVs 3. Kates Katering provides catered meals, and the catered meals industry is perfectly compet- itive. Kates machinery costs $100 per day and is the only fixed input. Her variable cost is comprised of the wages paid to the cooks and the food ingredients. The variable cost asso- ciated with each level of output is given in the accompanying table. P R O B L E M S a. Calculate the total cost, the average variable cost, the average total cost, and the mar- ginal cost for each quantity of output. b. What is the break-even price? What is the shut-down price? c. Suppose that the price at which Kate can sell catered meals is $21 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? d. Suppose that the price at which Kate can sell catered meals is $17 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? e. Suppose that the price at which Kate can sell catered meals is $13 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? 4. Bob produces DVD movies for sale, which requires only a building and a machine that copies the original movie onto a CD. Bob rents a building for $30,000 per month and rents a machine for $20,000 a month. Those are his fixed costs. His variable cost is given in thea machine for $20,000 a month....
View Full Document