Cost, price (Rand) 0 arks] Question 2 The following diagram shows the cost curves of a firm under perfect competition 20 20 12 8 60 80 100 MC AC Price AVC Output per day a. How much will the firm produce to maximise profits at a price of R20.00 per unit? (3) b. What will be its average cost of production at this output? (4) c. What is the total revenue of the profit-maximising firm in the short run? (2) d. How much profit will it make? (show calculations) (4) e. Below what price will the firm shut down in the short run? (2)
Cost, price (Rand) 0 arks] Question 2 The following diagram shows the cost curves of a firm under perfect competition 20 20 12 8 60 80 100 MC AC Price AVC Output per day a. How much will the firm produce to maximise profits at a price of R20.00 per unit? (3) b. What will be its average cost of production at this output? (4) c. What is the total revenue of the profit-maximising firm in the short run? (2) d. How much profit will it make? (show calculations) (4) e. Below what price will the firm shut down in the short run? (2)
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 37CTQ: How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant,...
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