You run a business that does framing on new houses. The table below shows your c

Question

You run a business that does framing on new houses. The table below shows your crew hiring options from 10 people/year to 150 people/year and the total number of houses framed per year (TPP).

1.Complete the rest of the table. (30 points)....I already calculated all of the calculation for this part.

2.What price per framed house will result in you shutting down ? (10 points)

3.What is the optimal long run scale of a framing operation in this industry in terms of number of workers and houses framed? (10 points)

4.If the going market price was $12,000 per framed house, how many people would you employ and how many houses would you frame in the current year? How about at a price of $15,000? (10 points)

5.Draw the supply curve for this firm (10 points)

6.Draw the market supply curve for this industry if there were 10 identical firms. (10 points)

7. Draw the Industry Supply Curve if labor costs rose to $60,000 per year (include both supply curves on the graph and label). (10 points)

–Neatness and clarity = 10

–Late not accepted

Labor (FTE) TP AP MP FC TVC TC AFC ATC AVC MC 10 140 14.00 0.0 400,000          1,430,000    1,830,000 2857.14 13,071.43 10,214.29 0.00 20 290 14.50 15.0 400,000          2,930,000    3,330,000 1379.31 11,482.76 10,103.45 10000.00 30 475 15.83 18.5 400,000          4,675,000    5,075,000 842.11 10,684.21    9,842.11 9432.43 40 650 16.25 17.5 400,000          6,350,000    6,750,000 615.38 10,384.62    9,769.23 9571.43 50 785 15.70 13.5 400,000          7,745,000    8,145,000 509.55 10,375.80    9,866.24 10333.33 60 910 15.17 12.5 400,000          9,070,000    9,470,000 439.56 10,406.59    9,967.03 10600.00 70 1025 14.64 11.5 400,000        10,325,000 10,725,000 390.24 10,463.41 10,073.17 10913.04 80 1130 14.13 10.5 400,000        11,510,000 11,910,000 353.98 10,539.82 10,185.84 11285.71 90 1225 13.61 9.5 400,000        12,625,000 13,025,000 326.53 10,632.65 10,306.12 11736.84 100 1310 13.10 8.5 400,000        13,670,000 14,070,000 305.34 10,740.46 10,435.11 12294.12 110 1385 12.59 7.5 400,000        14,645,000 15,045,000 288.81 10,862.82 10,574.01 13000.00 120 1450 12.08 6.5 400,000        15,550,000 15,950,000 275.86        11,000 10,724.14 13923.08 130 1505 11.58 5.5 400,000        16,385,000 16,785,000 265.78 11,152.82 10,887.04 15181.82 140 1550 11.07 4.5 400,000        17,150,000 17,550,000 258.06 11,322.58 11,064.52 17000.00 150 1585 10.57 3.5 400,000        17,845,000 18,245,000 252.37 11,511.04 11,258.68 19857.14

Explanation / Answer

2.We will shut down when price = minimum AVC which is the shut down point .So, P= 9769.23

3.Long run optimal is where cost is minimum. So the TP at this point will be the number of houses .Houses = 475

Labor = 30.

4)

If price == 12000. Then we will employ 90 labor and build 1225 houses wher profit is maximum.

Labor (FTE) TP TC TR profit 10 140 1830000.00 1680000 -150000.00 20 290 3330000.00 3480000 150000.00 30 475 5075000.00 5700000 625000.00 40 650 6750000.00 7800000 1050000.00 50 785 8145000.00 9420000 1275000.00 60 910 9470000.00 10920000 1450000.00 70 1025 10725000.00 12300000 1575000.00 80 1130 11910000.00 13560000 1650000.00 90 1225 13025000.00 14700000 1675000.00 100 1310 14070000.00 15720000 1650000.00 110 1385 15045000.00 16620000 1575000.00 120 1450 15950000.00 17400000 1450000.00 130 1505 16785000.00 18060000 1275000.00 140 1550 17550000.00 18600000 1050000.00 150 1585 18245000.00 19020000 775000.00

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.