1. If average total costs for a firm equal $3000 and average variable costs equa
ID: 1166371 • Letter: 1
Question
1.
If average total costs for a firm equal $3000 and average variable costs equal $2000 when the firm produces 50 units of a good, what are its total costs?
Select one:
a. $3000
b. $150,000
c. $60
d. $2000
2.
A firm sells rice in a perfectly competitive market. If the equilibrium price is $6 per bushel, how much rice will the firm sell? Answer the question using the table below.
Quantity
Marginal Cost
1000
2
1200
3
1400
4
1500
5
1600
6
Select one:
a. 1000
b. 1200
c. 1400
d. 1600
3.
Below is information for a firm which sells soybeans in a perfectly competitive market.
Output
MC
ATC
100
$4
$6
200
$8
$8
400
$12
$10
If the equilibrium price is $8, how much profit or loss will it make?
Select one:
a. -200
b. 0
c. 200
d. 800
Quantity
Marginal Cost
1000
2
1200
3
1400
4
1500
5
1600
6
Explanation / Answer
Answer:
Solution :
Total cost = AC*Q
AC/ATC = $3000
Q/units of good = 50
TC = $3000*50
= $150,000
2. The firm will sell rice: d. 1600
As given that equilibrium price is $6 and it is a perfect competitive market. In the perfect competitive market price, MC, MR, AR (demand) are equal so the equilibrium quantity will be 1600 where MC is equal to Price that is $6.
3. The firm will make profit : b . 0
As output quantity is equal to the demand
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