The Table Below Shows the Demand and Cost Data Facing

question 66

Essay

The table below shows the demand and cost data facing "Velvet Touches," a monopolistically competitive producer of velvet throw pillows.
Use the data to answer the following questions.
a. Complete the Total Revenue (TR), Marginal Revenue (MR) and Marginal Cost (MC) columns above.
b. What are the profit-maximizing price and quantity for Velvet Touches?
c. Is the firm making a profit or a loss? How much is the profit or loss? Show your work.
d. Is this firm operating in the long run or in the short run? Explain your answer.
e. If the firm's profit or loss is typical of all firms in the market for throw pillows, what is likely to happen in the future? Will there be more firms or will some existing firms leave the industry? Explain your answer.
f. What will happen to the typical firm's profit or loss after all entry/exit adjustments?

Distinguish between various forms of strikes and their strategic purposes.

Grasp the structure and strategy behind labor federation and union representation.

Analyze the impact of management philosophies on labor practices.

Understand the relationship between the labor movement and broader social movements, including civil rights.

---

Definitions:

Shutdown Point

The price and output level at which a firm's revenue just covers its variable costs, below which it is better for the firm to temporarily cease operations.

Short-run Supply Curve

The short-run supply curve illustrates how the quantity of goods supplied by producers changes in response to a change in price over a short period, factoring in some fixed production costs.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good or service changes as production volume varies.

Shutdown Point

The level of output and price where a firm's total revenue exactly covers its variable costs, below which the firm will cease production in the short run.