Question 3 Numerical fill in the blank question: Suppose a perfectly competitive

Question

Question 3

Numerical fill in the blank question: Suppose a perfectly competitive firm has the marginal cost function of MC = 3Q. The market price is given by P = $45. How many units of output will the firm produce? (Just enter your numerical answer – no symbols, units, or text).

Question 4

Numerical fill in the blank question: Suppose that at this same firm’s profit-maximizing level of output, average costs are ATC = $39. What are the firm’s total profits earned? (Just enter your numerical answer – no symbols, dollar signs, units, or text).

question:

A single-price monopolist can sell 7 units at price of $30 per unit and 8 units at a price of $25 per unit. The marginal revenue of the 8th unit is $______.

200

25

In a long-run monopolistically competitive equilibrium,

P > ATC, and ATC is not at its minimum value

Please answer all 4 of problems with explainations THX!!!

Explanation / Answer

3. Ans: 15

Explanation:

The equilibrium condition is

MC = P

3Q = 45

Q = 45 / 3 = 15

4. Ans: 90

Explanation:

Profit = TR - TC

= (45 * 15) - (39 * 15)

= 90

5. Ans:

Explanation:

MR of 8th unit = ($25 * 8) - ($30 * 7) = -10

6. Ans: P = ATC, and ATC is not at its minimum value.

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