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ECON 528 || QUESTIONS AND ANSWERS SOLVED 100% CORRECT!!
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  • Econ 528
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  • Econ 528

Value= correct answers =sum(t=1...n)((TRt)-TCt) / (1+i)t where t = time period / # of years i = discount rate = current interest rate firm value is maximized when: correct answers total revenue is maximized total cost for a given output is minimized total cost = correct answers aver...

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  • August 18, 2024
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • value

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  • Econ 528
  • Econ 528

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ECON 528 || QUESTIONS AND ANSWERS SOLVED
100% CORRECT!!
Value= correct answers =sum(t=1...n)((TRt)-TCt) / (1+i)t

where

t = time period / # of years
i = discount rate = current interest rate

firm value is maximized when: correct answers total revenue is maximized

total cost for a given output is minimized

total cost = correct answers average cost x quantity produced

AC x Q

Minimizing average cost also minimizes correct answers total cost for a given output

Minimizing average cost also maximizes correct answers firm value

Minimizing Total Cost also maximizes correct answers firm value

total revenue is a function of correct answers output quantity

Total Revenue = correct answers Price x Quantity

PxQ

If demand is linear, then price = correct answers a + bQ

where

Q is quantity demanded

a is the y-intercept (price intercept) and b is the slope coefficient

marginal revenue = correct answers change in total revenue / change in quantity produced

^TR / ^Q

total revenue is maximized where correct answers marginal revenue = 0 and increasing
output quantity causes marginal revenue to decrease

Total Cost = correct answers Fixed Cost + Variable Cost

FC + VC

, Profits = correct answers total revenue - total costs

TR - TC

(2 answers)

marginal profit = correct answers change in profit / change in output quantity

^P / ^Q

marginal revenue - marginal cost

MR - MC

profits are maximized where correct answers marginal profit = 0 and increasing output
quantity causes marginal profit to decrease

marginal revenue is positive while total revenue is _____ correct answers increasing

marginal revenue becomes negative when total revenue is ___- correct answers decreasing

revenue maximization occurs at the point of ____- correct answers greatest total revenues

operating period during which the availability of at least one input is fixed correct answers
short-run

time period in which the firm has complete flexibility with respect to input use correct
answers long-run

costs that do not vary with output correct answers fixed costs

costs that vary with output correct answers variable costs

change in total cost associated with a 1-unit change in output correct answers marginal cost

average cost = correct answers total cost / quantity produced

TC / Q

average cost is falling when correct answers MC < AC

average cost is rising when correct answers MC > AC

where MC = AC and AC falls with an increase in output correct answers AC is at max

where MC = AC and AC rises with an increase in output correct answers AC is at minimum

what is the firm's total loss where Q = 0? correct answers Fixed costs

FC

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