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Microeconomics Help

by Guest7820  |  12 years, 7 month(s) ago

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MOST IMPORTANT RULE: Firms will maximize profits and minimize losses only at the point where marginal revenue = marginal cost or MR = MC.

Problem: How many dresses to make?

Quantity of Dresses
500*
501

Average Total Cost
200
201

Total Cost

Question 1: You are currently producing 500 dresses at an average total cost of $200. You are the boss and you get a call from a customer that is willing to pay you $450 if you will produce one more dress, 501. Do you accept the order? Use MOST IMPORTANT RULE and use supporting data.

 Tags: Help, Microeconomics

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  1. amomipais82
    Hi There,
    Microeconomics (from prefix "micr(o)-" meaning "small" + "economics") is a branch of economics that studies how households and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine the supply and demand of goods and services.

  2. Guest3929
    how do you answer this question?

    3.  (24 points) Suppose a competitive firm can sell its output for $5 per unit.  The following table gives the firm’s short run production function.

    Labor Output
    0 0
    1 60
    2 130
    3 180
    4 220
    5 250
    6 260

    In the table below, you will determine several points on the firm’s demand curve for labor.  To do this, you must determine how many workers the firm should hire for different values of the wage rate in order to maximize profit.  Complete the table below:


    Wage Rate Per Worker Quantity Demanded of Workers
    $45
    $75
    $225
    $270
    $320
    $340
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