1. Perfect Competition: a. What are the key features of a perfectly competitive market? b. Will a perfectly competitive firm automatically close its doors if it is not making a profit? Why or why not? Make sure to discuss the different time frames. C. Suppose that you are the manager of a company that vaccinates human beings for biological diseases. Your company uses two inputs to produce vaccinations: physicians and laboratories. However, this is a short-run analysis where physicians are variable but laboratories are fixed. Suppose that each physician costs $500 per day (for an annual salary of about $175,000) and the daily cost for the laboratory is $1,500 (for rental cost of about $547,500 per year). In the short run, your company has 1 laboratory. The following table presents potential daily production levels with requisite input combinations. Physicians Laboratories Vaccinations (Q) TC TFC TVC MC ATC AFC AVC 3 1 1 3 1 4 15 1 24 1 36 51 1 00 1.

1. Perfect Competition: a. What are the key features of a perfectly competitive market? b. Will a perfectly competitive firm automatically close its doors if it is not making a profit? Why or why not? Make sure to discuss the different time frames. C. Suppose that you are the manager of a company that vaccinates human beings for biological diseases. Your company uses two inputs to produce vaccinations: physicians and laboratories. However, this is a short-run analysis where physicians are variable but laboratories are fixed. Suppose that each physician costs $500 per day (for an annual salary of about $175,000) and the daily cost for the laboratory is $1,500 (for rental cost of about $547,500 per year). In the short run, your company has 1 laboratory. The following table presents potential daily production levels with requisite input combinations. Physicians Laboratories Vaccinations (Q) TC TFC TVC MC ATC AFC AVC 3 1 1 3 1 4 15 1 24 1 36 51 1 00 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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