Assume the table below is extracted from Dodi company Ltd a perfectly competitive firm selling cabbages. Assume that when the firm's selling price is AUD 15, the marginal revenue is also AUD15. i. Complete the table below and answer the questions that follow. Quantity (Kg) AVC AFC ATC MC 2.50 7.50 5.10 3.50 9.00 3.00 9.00 4.50 10.00 2.50 12.50 5.50 14.00 1.80 13.00 6.00 18.00 1.67 15.00

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 3P
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Assume the table below is extracted from Dodi company Ltd a perfectly competitive firm
selling cabbages. Assume that when the firm's selling price is AUD 15, the marginal revenue
is also AUD15.
i. Complete the table below and answer the questions that follow.
Quantity (Kg)
AVC
AFC
ATC
MC
2.50
7.50
5.10
3.50
9.00
3.00
9.00
4.50
10.00
2.50
12.50
5.50
14.00
1.80
13.00
6.00
18.00
1.67
15.00
10.00
25.00
1.43
16.00
Qty = Quantity; AVC=Average variable cost; AFC = Average fixed cost; ATC=Average T otal
Cost; MC= Marginal Cost; Rev = Revenue; MR= Marginal Revenue; Kg = Kilogram
ii.
Based on your answers to the table above, identify the profit maximizing guantiy supplied
by the firm. Calculate the amount of profit/loss at this optimal point. Show your work.
iii.
State and examine the characteristics for a perfectly competitive firm such as Dodi
Ltd selling cabbages.
Transcribed Image Text:Assume the table below is extracted from Dodi company Ltd a perfectly competitive firm selling cabbages. Assume that when the firm's selling price is AUD 15, the marginal revenue is also AUD15. i. Complete the table below and answer the questions that follow. Quantity (Kg) AVC AFC ATC MC 2.50 7.50 5.10 3.50 9.00 3.00 9.00 4.50 10.00 2.50 12.50 5.50 14.00 1.80 13.00 6.00 18.00 1.67 15.00 10.00 25.00 1.43 16.00 Qty = Quantity; AVC=Average variable cost; AFC = Average fixed cost; ATC=Average T otal Cost; MC= Marginal Cost; Rev = Revenue; MR= Marginal Revenue; Kg = Kilogram ii. Based on your answers to the table above, identify the profit maximizing guantiy supplied by the firm. Calculate the amount of profit/loss at this optimal point. Show your work. iii. State and examine the characteristics for a perfectly competitive firm such as Dodi Ltd selling cabbages.
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