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3.4 The following problem traces the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a single firm in the short run. OUTPUT TFC TVC TC AVC ATC MC 0 $150 $ 0 1 40 2 100 3 180 4 280 5 400 6 560 7 760 8 1,000 9 1,300 10 1,850 b. Using the information in the table, fill in the following sup- ply schedule for this individual firm under perfect competi tion and indicate profit (positive or negative) at each outpu level. (Hint: At each hypothetical price, what is the MR of producing 1 more unit of output? Combine this with the MC of another unit to figure out the quantity supplied.) Price $ 40 70 110 140 180 220 260 400 Quantity Supplied Profit c. Now suppose there are 100 firms in this industry, all with identical cost schedules. Fill in the market quantity sup- plied at each price in this market. Price $ 40 Market Quantity Supplied Market Quantity Demanded $70 110 140 180 220 260 400 וווווווד 1,700 1,500 1,300 1,100 900 700 500 300

3.4 The following problem traces the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a single firm in the short run. OUTPUT TFC TVC TC AVC ATC MC 0 $150 $ 0 1 40 2 100 3 180 4 280 5 400 6 560 7 760 8 1,000 9 1,300 10 1,850 b. Using the information in the table, fill in the following sup- ply schedule for this individual firm under perfect competi tion and indicate profit (positive or negative) at each outpu level. (Hint: At each hypothetical price, what is the MR of producing 1 more unit of output? Combine this with the MC of another unit to figure out the quantity supplied.) Price $ 40 70 110 140 180 220 260 400 Quantity Supplied Profit c. Now suppose there are 100 firms in this industry, all with identical cost schedules. Fill in the market quantity sup- plied at each price in this market. Price $ 40 Market Quantity Supplied Market Quantity Demanded $70 110 140 180 220 260 400 וווווווד 1,700 1,500 1,300 1,100 900 700 500 300

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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d. Fill in the blanks: From the market supply and demand schedules in c., the equilibrium market price for this good isLand the equilibrium market quantity is firm will produce a quantity of. (profit/loss) equal to. e. In d., your answers characterize the short-run equilibrium in this market. Do they characterize the long-run equilib- rium as well? If so, explain why. If not, explain why not (that is, what would happen in the long run to change the equilibrium and why?). _. Each and earn a
Transcribed Image Text:d. Fill in the blanks: From the market supply and demand schedules in c., the equilibrium market price for this good isLand the equilibrium market quantity is firm will produce a quantity of. (profit/loss) equal to. e. In d., your answers characterize the short-run equilibrium in this market. Do they characterize the long-run equilib- rium as well? If so, explain why. If not, explain why not (that is, what would happen in the long run to change the equilibrium and why?). _. Each and earn a
3.4 The following problem traces the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a single firm in the short run. OUTPUT TFC TVC TC AVC АТС MC $150 $ 1 40 100 3 180 4 280 5 400 6 560 7 760 1,000 1,300 1,850 8 9 10 b. Using the information in the table, fill in the following sup- ply schedule for this individual firm under perfect competi- tion and indicate profit (positive or negative) at each output level. (Hint: At each hypothetical price, what is the MR of producing 1 more unit of output? Combine this with the MC of another unit to figure out the quantity supplied.) Quantity Supplied Price Profit $ 40 70 110 140 180 220 260 400 c. Now suppose there are 100 firms in this industry, all with identical cost schedules. Fill in the market quantity sup- plied at each price in this market. Market Quantity Supplied Market Quantity Demanded Price $ 40 1,700 1,500 70 110 1,300 140 1,100 180 900 220 700 260 500 400 300
Transcribed Image Text:3.4 The following problem traces the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a single firm in the short run. OUTPUT TFC TVC TC AVC АТС MC $150 $ 1 40 100 3 180 4 280 5 400 6 560 7 760 1,000 1,300 1,850 8 9 10 b. Using the information in the table, fill in the following sup- ply schedule for this individual firm under perfect competi- tion and indicate profit (positive or negative) at each output level. (Hint: At each hypothetical price, what is the MR of producing 1 more unit of output? Combine this with the MC of another unit to figure out the quantity supplied.) Quantity Supplied Price Profit $ 40 70 110 140 180 220 260 400 c. Now suppose there are 100 firms in this industry, all with identical cost schedules. Fill in the market quantity sup- plied at each price in this market. Market Quantity Supplied Market Quantity Demanded Price $ 40 1,700 1,500 70 110 1,300 140 1,100 180 900 220 700 260 500 400 300
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