(6+6+6+6+6+6 points) The graph below displays the short-run average variable cost (AVC), the short-run average total cost (ATC), and the marginal cost (MC) curves of a company Y which produces a homogenous product in a perfectly competitive industry. The vertical axis shows cost while horizontal axis shows the level of output. Suppose that the equilibrium price is equal to $30. MC $40 ATC $38 $30 AVC $20 $15 35 40 Output i. Using the graph above, find the profit-maximizing output of Y in the short-run and marginal revenue at this output. ii. Using the graph above, find the total fixed cost of Y. What is the average fixed cost when Y produces 40 units of output? Cost

(6+6+6+6+6+6 points) The graph below displays the short-run average variable cost (AVC), the short-run average total cost (ATC), and the marginal cost (MC) curves of a company Y which produces a homogenous product in a perfectly competitive industry. The vertical axis shows cost while horizontal axis shows the level of output. Suppose that the equilibrium price is equal to $30. MC $40 ATC $38 $30 AVC $20 $15 35 40 Output i. Using the graph above, find the profit-maximizing output of Y in the short-run and marginal revenue at this output. ii. Using the graph above, find the total fixed cost of Y. What is the average fixed cost when Y produces 40 units of output? Cost

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Transaction Costs, Asymmetric Information, And Behavioral Economics

Section: Chapter Questions

Problem 1.2P

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