Define revenue-generating non-profit organization

QUESTION 1
1A. State the profit maximizing decision rule for a for-profit firm.
Use the following data for problems 1B and 1C.
Total Total Marginal Marginal
Quantity Price Cost Revenue Revenue Cost
0 $5 $9 $0
1 $5 $10 $5
2 $5 $12 $10
3 $5 $15 $15
4 $5 $19 $20
5 $5 $24 $25
6 $5 $30 $30
7 $5 $45 $35
1B. Complete the Table for Marginal Revenue and Marginal Cost.
1C. Identify the profit maximizing output decision of the firm.
QUESTION 2

2A. Using the relationship between Average Cost (AC) and price, in equation form show the equation when a for-profit firm is experiencing zero profit.

2B. For the for-profit firm experiencing zero profit, illustrate the firm’s average cost curve,
marginal cost curve, and marginal revenue curve at the firm’s profit maximizing output assuming marginal revenue is constant.

QUESTION 3
3A. Using the relationship between Average Cost (AC) and price, in equation form show the equation when a for-profit firm is experiencing positive profit.

3B. For the for-profit firm experiencing positive profit, illustrate the firm’s average cost curve, marginal cost curve, and marginal revenue curve at the firm’s profit maximizing output assuming marginal revenue is constant.

QUESTION 4
4A. Using the relationship between Average Cost (AC) and price, in equation form show the equation when a for-profit firm is experiencing negative profit.

4B. For the for-profit firm experiencing negative profit, illustrate the firm’s average cost curve,
marginal cost curve, and marginal revenue curve at the firm’s profit maximizing output
assuming marginal revenue is constant.
QUESTION 5
5A. State the Law of Supply.
5B. Assume three for-profit firms are able to supply Good X, Firm A, Firm B, and Firm C. For
Firm A, average cost equals marginal cost at price $2; for Firm B, average cost equals marginal
cost at price $3; for Firm C, average cost equals marginal cost at price $4.
Showing actual prices on the vertical axis and total quantity on the horizontal axis, construct a
supply curve for Good X.
5C. If the price of Good X is $3, identify the firm earning positive profit, zero profit, and negative
profit.

QUESTION 6
6A. Define the term law of diminishing returns.
Use the following data for problems 6B.
Labor Total Average Marginal
Output Output Product
0 0
1 15
2 34
3 51
4 65
5 74
6B. Complete the Table for Average Output and Marginal Output.
6C. Graph the marginal product for the five workers. After which worker is hired do diminishing
returns set in?
QUESTION 7
7A. Define revenue-generating non-profit organization.
7B. For the revenue-generating non-profit organization, illustrate the firm’s average cost curve,
marginal cost curve, and marginal revenue curve at the firm’s optimal output assuming
marginal revenue is constant.
7C. Using the relationship between Average Cost (AC) and price, explain how a revenue-
generating non-profit organization is a not for profit organization.
QUESTION 8
8A. Write the output maximizing decision rule for a fee-free non-profit organization.
8B. Starting with the data from the below table, showing actual prices on the vertical axis
construct the demand curve for the fee-free non-profit organization.
Quantity of Total
service cost
20 $10,000
40 $20,000
60 $30,000
80 $40,000
100 $50,000
120 $60,000
8C. If transports must be provided in bundles of 20 and revenues for the non-profit
organization are $40,000, what is the number of medical transports provided.
8D. If transports must be provided in bundles of 20 and revenues for the non-profit
organization increase to $50,000, what is the number of medical transports provided.
8E. If transports must be provided in bundles of 20 and revenues for the non-profit organization
remain the same at $40,000, but costs increase by 20% (0.20), what is the number of medical
transports provided after the cost increase?

Last Completed Projects