Assume the following cost data are for a purely competitive producerTotal ProductAFCAVCATCMC0 1$60$45$105$452$30$42.50$72.50$403$20$40$60$354$15$37.50$52.50$305$12$37$49$356$10$37.50$47.50$407$8.57$38.57$47.14$458$7.50$40.63$48.13$559$6.67$43.33$50$6510$6.00$46.50$52.50$75At a price product of $56, will this firm produce in the short run? Why or Why not? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output?

The shutdown point of a firm describes the minimum level of marginal revenue imperative for the firm…

Answered: Assume the following cost data are for…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 3E

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Assume the following cost data are for a purely competitive producer

Total Product	AFC	AVC	ATC	MC
0
1	$60	$45	$105	$45
2	$30	$42.50	$72.50	$40
3	$20	$40	$60	$35
4	$15	$37.50	$52.50	$30
5	$12	$37	$49	$35
6	$10	$37.50	$47.50	$40
7	$8.57	$38.57	$47.14	$45
8	$7.50	$40.63	$48.13	$55
9	$6.67	$43.33	$50	$65
10	$6.00	$46.50	$52.50	$75

At a price product of $56, will this firm produce in the short run? Why or Why not? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output?

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