Given the following short run production cost schedule: Short Run Total Cost Function Quantity Produced Total Cost ($) 0 20 10 27 20 38 30 53 40 73 50 100 60 130 The table above gives the short run total cost function for a typical firm in a perfectly competitive industry. Please answer related questions below (a) What is the dollar value of the firm’s total fixed cost? (b) At what level of quantity, the average total cost is minimized? Show your work. (c) Calculate the marginal cost of producing the first 10 units of output? Show your work (d) At what level of quantity, the marginal cost is lowest? (e) Explain the average-marginal rule in cost curves? (f) What is the market price? (Assume the firm is operating in a pure competitive market.) (g) If the firm enjoys market power than the firm’s market price will be higher or lower than the competitive market price? Why?
Given the following short run production cost schedule:
|
Short Run Total Cost Function |
|
|
Quantity Produced |
Total Cost ($) |
|
0 |
20 |
|
10 |
27 |
|
20 |
38 |
|
30 |
53 |
|
40 |
73 |
|
50 |
100 |
|
60 |
130 |
The table above gives the short run total cost function for a typical firm in a
(a) What is the dollar value of the firm’s total fixed cost?
(b) At what level of quantity, the
(c) Calculate the marginal cost of producing the first 10 units of output? Show your work
(d) At what level of quantity, the marginal cost is lowest?
(e) Explain the average-marginal rule in cost
(f) What is the market price? (Assume the firm is operating in a pure competitive market.)
(g) If the firm enjoys market power than the firm’s market price will be higher or lower than the competitive market price? Why?
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