Assume that the following cost data are for a purely competitive producer Total

Question

Assume that the following cost data are for a purely competitive producer Total Product Marginal 0.00 45.00 40.00 35.00 30.00 35.00 40.00 45.00 55.00 65.00 75.00 45.00$ 105,00$ 6000 S 30 00S42.50S 20.00 15.00 S 12.00 10.00$ 857 $ 7.50 $ 4000 S 3750 37.00S 37.50 38.57S 40.63 $ 72.50 60.00 52.50 $ 49.00 47.50 47.14 48.13 $ 6671 s 43.331 s 50.00- 10 600 S 4650$ 52.50 S Answer the questions in the first column in the table below for the price listed at the top of each of the other three columns Instructions: If you are entering any negative numbers be sure to inck a negative sign (-in tront or At a product price of $67.00 At a product price of $42.00 At a product price of $33.00 Will this firm produce in the short run? (Click to select) (Cick to select) (Click to select Click to select) output (Click to select) (Click toselect) If it is preferable to produce, what will be the profit maximizing or loss-minimizing output? units l output |units output :| |units per firm per frm What economic proft or los vwill the frm realize per unit of Click to select) (Click to select per unit = (Click to select) per unit $ d In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) Instructions: Enter your answers as whole numbers. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers

Explanation / Answer

A perfectly competitive firm is in equilibrium when marginal revenue is same as marginal cost and marginal revenue is same as price. A firm is in short run equilibrium if it is making either profit or loss because, in long run, a firm earns only normal profits.

Profit per unit = ATC - P

67 - 50 = 17

MR = P = 67 42 33 Production Yes (MC = MR between 9th and 10 th unit) and at this point P>ATC. Firm is making profit and will continue production is short run. Yes Yes Output 9 (Coreespoding output at the price = MC point) 6 4 Profit or Loss

Profit per unit = ATC - P

67 - 50 = 17

47.5 - 42 = 5.5 42.5 - 33 = 9.5

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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