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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||||

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||||

Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: Firms In Competitive Markets
Section: Chapter Questions
Problem 4PA
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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||||
Transcribed Image Text: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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