f Assume that the cost data in the top table of the next column are purely compe

Question

f Assume that the cost data in the top table of the next column are purely competitive producer Total Product Average Fived Cost Average Variable Cost Average Total Cost Marginal Cost 0 1 $ 60,000 $45.00 105.00 $45 2 30,00 42.50 72.50 40 3 20.00 40.00 60.00 35 4 15.00 37.50 52.50 30 5 12.00 37.00 49.00 35 6 10.00 37.50 47.50 40 7 8.57 38.57 47.14 45 8 7.50 40.63 48.13 55 9 6.67 43.33 50.00 65 10 6.00 46.50 52.50 75 A. At a product price of $56, will this firm produce in the short run, if the following conditions prevail profit/loss maximizing and economic profit/loss will the firm realize per unit output?

Explanation / Answer

No, because $32 is always less than AVC. If it did produce, its output would be 4—found by expanding output until MR no longer exceeds MC. By producing 4 units, it would lose = [ 4* ($32 - $52.50)] = $82 . By Not producing, it would lose only its total fixed cost of $60.

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

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