3.3 Frances sells pencils in the perfectly competitive pencil market. Her output per day and hercosts are as follows:Variable CostOutput perDayTotal CostАТСAVCMC$1.002.50123.5034.2044.505.206.6.8078.708.10.70a. If the current equilibrium price in the pencil market is $1.80, how many pencils will Francesproduce, what price will she charge, and how much profit (or loss) will she make? (1)

* Total cost = Fixed cost + variable cost * AverageTotal Cost = TCQ* Average variable cost =…

3.3 Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costs are as follows: Output per Day Total Cost Variable Cost АТС AVC MC $1.00 1 2.50 3.50 3 4.20 4 4.50 5 5.20 6. 6.80 7 8.70 8. 10.70 a. If the current equilibrium price in the pencil market is $1.80, how many pencils will Frances

3.3 Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costs are as follows: Output per Day Total Cost Variable Cost АТС AVC MC $1.00 1 2.50 3.50 3 4.20 4 4.50 5 5.20 6. 6.80 7 8.70 8. 10.70 a. If the current equilibrium price in the pencil market is $1.80, how many pencils will Frances

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Karim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Karim initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Karim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Karim must lower the price from $60,000 to $40,000 per truck. Notice that Karim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $40,000 rather than $60,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) A 82 8288 289 RO 220 200 100 100 140 120 100 Demand 3 A A A ΔΔ 0 5…
D, E nad F
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Does a compentve firms price equal its marginal cost in a short run, on the long run or both? Explain, Does a competitive firms price equal the minimum of its average total cost in the short run, in the long run, or both ? Explain
The accompanying graph depicts the cost curves of an individual firm in a perfectly (or purely) competitive industry.
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