QUESTION: Complete the table and answer the following questions. The price for this perfectly competitive firm is $210. QTY 1 2 3 4 5 6 7 8 9 10 FC VC TC 700 825 975 1045 1120 1200 1285 1375 1540 1750 2205 AFC a. Should this firm produce? b. If so, how many units should it produce? c. What is the economic profit or economic loss? AVC ATC MC MR

QUESTION: Complete the table and answer the following questions. The price for this perfectly competitive firm is $210. QTY 1 2 3 4 5 6 7 8 9 10 FC VC TC 700 825 975 1045 1120 1200 1285 1375 1540 1750 2205 AFC a. Should this firm produce? b. If so, how many units should it produce? c. What is the economic profit or economic loss? AVC ATC MC MR

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 5.10P

See similar textbooks

Similar questions

What are the four basic assumptions of perfect competition? Explain in words what they imply for a perfectly competitive firm.
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
In the argument for why perfect competition is allocatively efficient, the price that people are willing to pay represents the gains to society and the marginal cost to the film represents the costs to society. Can you think of some social costs or issues that are not included in the marginal cost to the firm? Or some social gains that are not included in what people pay for a good?
Should a firm shut down immediately if it is making losses?
How does the average cost curve help to show whether a firm is making profits or losses?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
Why will profits for films in a perfectly competitive industry tend to vanish in the long run?
Can you name five examples of perfectly competitive markets? Why or why not?
How does the average variable cost curve help a firm know whether it should shut down immediately?
Will a perfectly competitive market display productive efficiency? Why or why not?
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?