1. The following table shows information on equilibrium price and different costs at the profitmaximizing/loss minimizing point for a perfect competitive firm.Equilibrium PriceQuantity of output produced$360unitsTotal RevenueAverage total cost per unitTotal CostAverage variable costTotal Fixed costProfit/Loss$12$4(a) Calculate and fill in the missing information of the table. Is the perfect competitive firmincurring a loss or a profit? Based on your calculation state whether the firm should continue inthe market or leave the market?(b) Based on your calculation, draw the appropriate diagram with the ATC, MC, AVC, MR anddemand curves to represent the above scenario.

Price $3 Quantity of output produced 60 units Total Revenue $180 Average Total Cost $12…

1. The following table shows information on equilibrium price and different costs at the profit maximizing/loss minimizing point for a perfect competitive firm. Equilibrium Price Quantity of output produced Total Revenue Average total cost per unit Total Cost Average variable cost Total Fixed cost Profit/Loss $3 60units $12 $4 (a) Calculate and fill in the missing information of the table. Is the perfect competitive firm incurring a loss or a profit? Based on your calculation state whether the firm should continue in the market or leave the market?

1. The following table shows information on equilibrium price and different costs at the profit maximizing/loss minimizing point for a perfect competitive firm. Equilibrium Price Quantity of output produced Total Revenue Average total cost per unit Total Cost Average variable cost Total Fixed cost Profit/Loss $3 60units $12 $4 (a) Calculate and fill in the missing information of the table. Is the perfect competitive firm incurring a loss or a profit? Based on your calculation state whether the firm should continue in the market or leave the market?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...

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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total variable costs are 20 for one aquarium, 25 for two units, 35 for the three units, 50 for four units, and 80 for five units. In the form of a table, calculate total revenue, marginal revenue, total cost, and marginal cost for each output level (one to five units). What is the Profit-maximizing quantity of output? On one diagram, sketch the total revenue and total cost curves. On another diagram, sketch the marginal revenue and marginal cost curves.
If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.