A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. a). Is the efficient scale of the firm more than, less than, or exactly 100 units?

A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. a). Is the efficient scale of the firm more than, less than, or exactly 100 units?

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter8: Perefect Competition

Section: Chapter Questions

Problem 13SQ

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Question

A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200.
a). Is the efficient scale of the firm more than, less than, or exactly 100 units?

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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