DereT:n?(Key Question) Assume the following cost data are for a purely competitive producer:21-4AveragevariableAveragetotalAveragefixedMarginalcostTotalProductcostcostcost$4540$105.0072.5060.0052.5049.0047.50$45.0042.5040.00$60.0030.0020.0015.0012.0010.00353037.5037.0037.5038.5740.6343.3346.503540456.47.14558.5748.1350.0052.50657.506.6775106.00a. At a product price of $56, will this firm produce in the short run? Why or why not? If it ispreferable to produce, what will be the profit-maximízing or loss-minimizing output?Explain. What economic profit or loss will the firm realize per unit of output?b. Answer the relevant questions of 4a assuming product price is $41.c. Answer the relevant questions of 4a assuming product price is $32.d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) andindicate the profit or loss incurred at each output (column 3).(4)Quantitysupplied,1500 firms(3)(2)Quantitysupplied,single firm(1)Profit (+)or loss (1)Price$26323841465666e. Explain: "That segment of a competitive firm's marginal-cost curve which lies above itsaverage-variable-cost curve constitutes the short-run supply curve for the firm." Illustrategraphically.f. Now assume there are 1500 identical firms in this competitive industry; that is, there are 1500firms, each of which has the same cost data as shown here. Calculate the industry supplyschedule (column 4).99TI||||JIII|||TI||||

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Asked Dec 9, 2019
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Hello, can I get help with the last three parts of this question?

Dere
T:n?
(Key Question) Assume the following cost data are for a purely competitive producer:
21-4
Average
variable
Average
total
Average
fixed
Marginal
cost
Total
Product
cost
cost
cost
$45
40
$105.00
72.50
60.00
52.50
49.00
47.50
$45.00
42.50
40.00
$60.00
30.00
20.00
15.00
12.00
10.00
35
30
37.50
37.00
37.50
38.57
40.63
43.33
46.50
35
40
45
6.
47.14
55
8.57
48.13
50.00
52.50
65
7.50
6.67
75
10
6.00
a. At a product price 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-maximízing or loss-minimizing output?
Explain. What economic profit or loss will the firm realize per unit of output?
b. Answer the relevant questions of 4a assuming product price is $41.
c. Answer the relevant questions of 4a assuming product price is $32.
d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and
indicate the profit or loss incurred at each output (column 3).
(4)
Quantity
supplied,
1500 firms
(3)
(2)
Quantity
supplied,
single firm
(1)
Profit (+)
or loss (1)
Price
$26
32
38
41
46
56
66
e. Explain: "That segment of a competitive firm's marginal-cost curve which lies above its
average-variable-cost curve constitutes the short-run supply curve for the firm." Illustrate
graphically.
f. Now assume there are 1500 identical firms in this competitive industry; that is, there are 1500
firms, each of which has the same cost data as shown here. Calculate the industry supply
schedule (column 4).
99
TI||||
JIII|||
TI||||
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Dere T:n? (Key Question) Assume the following cost data are for a purely competitive producer: 21-4 Average variable Average total Average fixed Marginal cost Total Product cost cost cost $45 40 $105.00 72.50 60.00 52.50 49.00 47.50 $45.00 42.50 40.00 $60.00 30.00 20.00 15.00 12.00 10.00 35 30 37.50 37.00 37.50 38.57 40.63 43.33 46.50 35 40 45 6. 47.14 55 8.57 48.13 50.00 52.50 65 7.50 6.67 75 10 6.00 a. At a product price 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-maximízing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output? b. Answer the relevant questions of 4a assuming product price is $41. c. Answer the relevant questions of 4a assuming product price is $32. d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3). (4) Quantity supplied, 1500 firms (3) (2) Quantity supplied, single firm (1) Profit (+) or loss (1) Price $26 32 38 41 46 56 66 e. Explain: "That segment of a competitive firm's marginal-cost curve which lies above its average-variable-cost curve constitutes the short-run supply curve for the firm." Illustrate graphically. f. Now assume there are 1500 identical firms in this competitive industry; that is, there are 1500 firms, each of which has the same cost data as shown here. Calculate the industry supply schedule (column 4). 99 TI|||| JIII||| TI||||

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Step 1

d) For price equal to 26 and 32 dollars there is no AVC less than P thus, quantity supplied is zero. At price equal to 38 P is greater than AVC at Q = 5 and Q = 4 units. The loss at Q = 4 is of 58 dollars which is higher than the loss at Q =5 of 55 dollars. Thus, at P = 38, Q = 5. At further prices quantity supplied is shown in the table below.

Loss when quantity supplied is zero is of fixed cost which is 60 dollars.

Profit/Loss when some unit of goods are supplied is calculated by subtracting Total cost (TC) from Total revenue (TR).

TC = ATC * Q

TR = P*Q

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Quantity Quantity Profit (+) Price Supplied Supplied or Loss(-) (Single Firm) |(1500 Firms) -60 26 -60 32 38 -55 7,500 41 6 -39 9,000 46 -8 10,500 63 56 12,000 66 144 13,500

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Step 2

e) When price is less than AVC, the firm is not able to cover up its both fixed cost and a part of it variable cost and thus, it is better for a firm to stop producing till the point P < AVC. Thus, short run equilibrium output is zero when P is less than AVC.

Now at a price OP1 P = MC = minimum of AVC such that a firm is just able to cover its variable cost and it does not cover u...

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ATC Pi QUANTITY PRICE, COST

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