. Output . The following table shows the costs that a firm in perfect competition (where MR-AR=P) faces: . 0 1 2 3 4 5 6 7 Fixed Variable Total Cost Cost Cost $0 $40 $100 $170 $250 $360 $580 $920 Average Total Cost Marginal Cost a. Taking into account that the firm has a fixed cost of $130, complete the table. b. If the market price is $220, what is the level of output that the firm should produce in order to maximise profit? Calculate the maximum profit. c. If the market price falls to $70, what should the firm do?

. Output . The following table shows the costs that a firm in perfect competition (where MR-AR=P) faces: . 0 1 2 3 4 5 6 7 Fixed Variable Total Cost Cost Cost $0 $40 $100 $170 $250 $360 $580 $920 Average Total Cost Marginal Cost a. Taking into account that the firm has a fixed cost of $130, complete the table. b. If the market price is $220, what is the level of output that the firm should produce in order to maximise profit? Calculate the maximum profit. c. If the market price falls to $70, what should the firm do?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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