The following table shows partial cost information of White T-shirt Manufacturing Company. The T-shirt market is a perfectly competitive market. Quantity Total fixed cost Average variable cost $70 $70 $10 1 $70 $15 $70 $20 3 $70 $25 4 $70 $32 $70 $40 The market price of T-shirt is $60 each. At what quantity should the company produce to maximize profit/minimize loss? Explain A. your answer. Calculate the profit or loss of the company if it produces at the quantity that maximizes B. profit/minimize loss. Is the current situation in a long-run equilibrium? Explain you answer. C. At what quantity is the company's Efficient Scale? Explain your answer. D.

The following table shows partial cost information of White T-shirt Manufacturing Company. The T-shirt market is a perfectly competitive market. Quantity Total fixed cost Average variable cost $70 $70 $10 1 $70 $15 $70 $20 3 $70 $25 4 $70 $32 $70 $40 The market price of T-shirt is $60 each. At what quantity should the company produce to maximize profit/minimize loss? Explain A. your answer. Calculate the profit or loss of the company if it produces at the quantity that maximizes B. profit/minimize loss. Is the current situation in a long-run equilibrium? Explain you answer. C. At what quantity is the company's Efficient Scale? Explain your answer. D.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 4.7P

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