Exam 9: Maximizing Profit

A custom paper company finds that when the price of paper is $5, its total revenues are $60,000. Its total costs are $70,000, of which $57,000 are variable costs. From this we can infer

If: (1) you produce 1,000 units, (2) your total revenue is $7,500, (3) the wage rate you pay each of the 10 workers you hired is $9.50 per hour, and (4) they each work 8 hours to produce that 1,000 units, then you should not shut down.

The goals of charitable organizations are inevitably inconsistent with the principles associated with profit maximization.

Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of $40,000 when the price of fish is $8. Suppose the boat dealer had overcharged the boat owner for the boat. Upon receiving a refund of $25,000 from the dealer, what will happen to the ATC of producing 10,000 fish?

Suppose Al, Betty, and Carl own the only fishing companies in your village. Suppose the market price today is $10 per fish. Suppose Al catches 4,000 fish with an average total cost of $7.50, Betty catches 6,000 fish with an average total cost of $6, and Carl catches10,000 fish with an average total cost of $5. If everyone is a profit maximizer, what is Betty's marginal cost?

Lynne teaches violin lessons. She charges $10 for each lesson. Her marginal cost per lesson is $4, and her ATC per lesson is also $4. If she can increase the number of lessons she teaches and still charge $10 per lesson, should she? How will she know when she is maximizing her profit?

According to the text, Israelis living on a kibbutz in Israel

At the end of the day, Gracia's Pizza looks into the cash register to count up the day's total revenue. Another way of calculating its total revenue would be to find

Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have the following data: P = $20, AVC = $10, AFC = $12, and quantity of birthday cakes produced a day is 20.You conclude that the bakery ends up at the end of the day with a

Total profit can be calculated by

Average revenue is another way of describing

If a firm is currently producing where MR = MC and price = $24, AVC = $22, and ATC = $26, then in the long run this firm should

The Marshall Lions Club increased the price of hamburgers at their Celebrate Marshall Festival and found that revenues increased. This is likely because, ceteris paribus,

It may be advisable for a firm to stay in business, even if it's losing money,

-In Exhibit I-9, the maximum profit at the price of $8 is

Does minimizing average total costs ensure that a firm is maximizing its profits?