Assume that the above cost data is for a perfectly competitive firm. Using this data answer the following: (a) If the market equilibrium price that this firm charges is $50, what level of output must this firm produce to maximize its profit? (b) What would be the amount of profit that this firm would earn if it produced at the profit-maximizing level of output? (1)Quantity ofOutput, Q(units)(3)(5)AverageTotal Variable Variable Cost(AVgAverageFixed Cost(4)(8)Average Total Marginal CostCost (ATC)(7)Total FixedCost (S)(6)Total Cost (TC)(AFC)Cost (TVC)$200$0V20030GG220050HH3200604.200E65프20075P.AAKKUU200G95BBVV7200125RCCMMww200165DDNNXX200215EEYY10200275FFPP77Il - - XI

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Answered: Assume that the above cost data is for…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 23RQ: Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost,...

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Assume that the above cost data is for a perfectly competitive firm. Using this data answer the following:

(a) If the market equilibrium price that this firm charges is $50, what level of output must this firm produce to maximize its profit?

(b) What would be the amount of profit that this firm would earn if it produced at the profit-maximizing level of output?

(1)
Quantity of
Output, Q
(units)
(3)
(5)
Average
Total Variable Variable Cost
(AVg
Average
Fixed Cost
(4)
(8)
Average Total Marginal Cost
Cost (ATC)
(7)
Total Fixed
Cost (S)
(6)
Total Cost (TC)
(AFC)
Cost (TVC)
$200
$0
V
200
30
GG
2
200
50
HH
3
200
60
4.
200
E
65
프
200
75
P.
AA
KK
UU
200
G
95
BB
VV
7
200
125
R
CC
MM
ww
200
165
DD
NN
XX
200
215
EE
YY
10
200
275
FF
PP
77
Il - - XI

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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