Points are listed in the brackets in each part Assume the short-run cost table above represents the cost for a firm in a purely competitive industry. Total product is the Q of production. Total product TFC TVC TC AFC AVC ATC MC 1 40 95 2 75 15 4 150 135 170 Complete the table above b. Applying the rule of profit maximization, if the product market price of $35, will this firm produce, why or why not а. c. At price $35, how much should this firm produce? d. How much will the profit/loss./break-even? e. How much is the marginal revenue?
Points are listed in the brackets in each part Assume the short-run cost table above represents the cost for a firm in a purely competitive industry. Total product is the Q of production. Total product TFC TVC TC AFC AVC ATC MC 1 40 95 2 75 15 4 150 135 170 Complete the table above b. Applying the rule of profit maximization, if the product market price of $35, will this firm produce, why or why not а. c. At price $35, how much should this firm produce? d. How much will the profit/loss./break-even? e. How much is the marginal revenue?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition
Section: Chapter Questions
Problem 6E
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Transcribed Image Text:Points are listed in the brackets in each part
Assume the short-run cost table above represents the cost for a firm in a purely competitive
industry. Total product is the Q of production.
Total product
TFC
TVC
TC
AFC
AVC
АТС
MC
1
40
95
2
75
15
4
150
135
6
170
a. Complete the table above
b. Applying the rule of profit maximization, if the product market price of $35, will this
firm produce, why or why not
c. At price $35, how much should this firm produce?
d. How much will the profit/loss./break-even?
e. How much is the marginal revenue?
f. Show the situation graphically with MR, Demand, ATC, AVC, and MC graphs. Label
the equilibrium Q and Price points
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