Assume that a firm is a perfectly competitive industry has the following total c

Question

Assume that a firm is a perfectly competitive industry has the following total cost schedule

Outputs (units) <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

Total Cost ($)

10

$110

15

$150

20

$180

25

$225

30

$300

35

$385

40

$480

b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are the profits per unit? What are total profits?

Outputs (units) <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

Total Cost ($)

10

$110

15

$150

20

$180

25

$225

30

$300

35

$385

40

$480

Explanation / Answer

the price per unit is cost/unit 1.11$ 2.10$ 3.9$ 4.9$ 5.10$ 6.11$ 7.12$ now the market price is 17$ so all units will be sold; the produced units are=10+15+20+25+30+35+40=150; the total profits are 6$*10=60, 7$*15=105, 8$*20=160, 8$*25=200, 7$*30=210 6$*35=210 5$*40=200

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