2. Table below refers to a PC firm.Firm1PriceQuantityproduced perunit$120$120$120$120$120$120$120$120$120$1200123456789Total Marginal Total Marginal profit Marginal ATCRevenue revenue costprofitcost0120100150202257317385465562682812a) Complete the table.b) What is the profit-maximizing output?c) What is the relationship between price, marginal revenue and marginal cost at theprofit maximizing level of output?d) If the P were RM80, should the firm continue to operate? Why or why not?e) Draw the firm's short run SS curve

Perfect competition is a market form with a high number of buyers and a high number of sellers.…

2. Table below refers to a PC firm. Firm 1 Quantity Price Total produced per Revenue unit $120 $120 $120 0 1 2 3 4 5 6 7 8 9 $120 $120 $120 $120 $120 $120 $120 0 120 a) Complete the table. b) What is the profit-maximizing output? Marginal Total Marginal profit Marginal ATC revenue profit cost cost 100 150 202 257 317 385 465 562 682 812 c) What is the relationship between price, marginal revenue and marginal cost at the profit maximizing level of output? d) If the P were RM80, should the firm continue to operate? Why or why not? e) Draw the firm's short run SS curve

2. Table below refers to a PC firm. Firm 1 Quantity Price Total produced per Revenue unit $120 $120 $120 0 1 2 3 4 5 6 7 8 9 $120 $120 $120 $120 $120 $120 $120 0 120 a) Complete the table. b) What is the profit-maximizing output? Marginal Total Marginal profit Marginal ATC revenue profit cost cost 100 150 202 257 317 385 465 562 682 812 c) What is the relationship between price, marginal revenue and marginal cost at the profit maximizing level of output? d) If the P were RM80, should the firm continue to operate? Why or why not? e) Draw the firm's short run SS curve

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Table below refers to a PC firm.
Firm
1
Price
Quantity
produced per
unit
$120
$120
$120
$120
$120
$120
$120
$120
$120
$120
0
1
2
3
4
5
6
7
8
9
Total Marginal Total Marginal profit Marginal ATC
Revenue revenue cost
profit
cost
0
120
100
150
202
257
317
385
465
562
682
812
a) Complete the table.
b) What is the profit-maximizing output?
c) What is the relationship between price, marginal revenue and marginal cost at the
profit maximizing level of output?
d) If the P were RM80, should the firm continue to operate? Why or why not?
e) Draw the firm's short run SS curve

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Step 1: Define perfect competition.

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Step 2: Complete the table.

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Step 3: Calculate the equilibrium level.

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Step 4: Calculate if the firm should operate when the price is RM80.

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Step 5: Draw the graph for the short run supply curve.

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