Revenue and Cost Data for a Perfectly Competitive Firm Daily Output Price Total Revenue TFC TVC TC Profit 0. $30 $0 V $0 $40 -$40 $30 $30 $40 $12 W -$22 $60 $40 Y $68 -$8 3. $30 $90 $40 $45 $85 Refer to Table 8-1. What is the value of the variable Z? -$45 -$48 $0 $5
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- What is die difference between accounting and economic profit?Suppose that the market price increases to 6, as Table 8.14 shows. What would happen to the profit-maximizing output level?Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as the incumbent tries to bleak into the market by selling 4,000 units of output. Estimate from the graph what the new firms average cost of producing output would be. If the incumbent continues. to produce 6,000 units, how much output would the two films supply to the market? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn? Figure 9.2 Economics of Scale and Natural Monoploy
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