4. A firm in a purely competitive industry is currently producing 1, 500 units per day at a total cost of $500. If the firm produced 1,000 units per day, its total cost would be $310, and if it produced 500 units per day, its total cost would be $175. a. What are the firm's ATC at these three levels of production? i. At 1,500 units per day, ATC = $. ii. At 1,000 units per day, ATC = S. ll. At 500 units per day, ATC = S. b. If all firms have the same cost structure, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?

4. A firm in a purely competitive industry is currently producing 1, 500 units per day at a total cost of $500. If the firm produced 1,000 units per day, its total cost would be $310, and if it produced 500 units per day, its total cost would be $175. a. What are the firm's ATC at these three levels of production? i. At 1,500 units per day, ATC = $. ii. At 1,000 units per day, ATC = S. ll. At 500 units per day, ATC = S. b. If all firms have the same cost structure, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is correct if the firm described in Figure 7-4 decides to produce nothing? a. Total cost will be zero. b. Total fixed cost will be zero. c. Total variable cost will be zero. d. Average cost will be zero. e. It is impossible for the firm to produce nothing in the short run.
3.
Show all the necessary steps and/or reasoning that lead to your answers. No credits will be given to answers without necessary steps and/or reasoning. 1. Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market. AFC Output Fixed Cost 1 2 3 4 5 $50 $50 $50 $50 $50 Variable AVC Cost $30 $50 $80 $120 $170 Total cost ATC MC a. Fill in the blank columns b. What is the minimum price needed by the firm to break even? c. What is the shut down price? d. At a price of $40, what output level would the firm produce? What would its profits be? 2. What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?
Price and Cost ($) Given the information from the figure, if price equals $0.40, the firm should ATC 1.2 AVC 0.8 0.6 0.4 0.2 0.2 0.4 9'0 0.8 Output 1.2 O stay open because it is making an economic profit O stay open in the short run only because it is operating at an economic loss O stay open because it is making a normal profit O shut down in the short run because it will minimize its loss
Answer Question 6
Tåble Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs Costs 0. $50.00 $0.00 1 $50.00 $70.00 $50.00 $120.00 $50.00 $150.00 4 $50.00 $220.00 $50.00 $300.00 Refer to Table Cost.EX2. When production is 3 units, the firm's average total cost is'about O $66.67 $68.67 No answer text provided. O No answer text provided.
A perfectly competitive firm has total revenue of $10,000 from its daily output. That output is the profit-maximizing output. The firm's average cost is $15, its marginal cost is $20, and its average variable cost is $10. What is the profit the firm is making at this output level? What total variable costs does it incur? Its total fixed costs? B Show transcribed image text
2.Assume the following cost data are for a purely competitive producer: see table below: Total Average Product Fixed Cost I 2 3 4 5 6 7 8 9 10 $60.00 30.00 20.00 15.00 12.00 10.00 8.57 7.50 6.67 6.00 Average Variable Cost $45.00 42.50 40.00 37.50 37.00 37.50 38.57 40.63 43.33 46.50 Average Marginal Total Cost Cost $105.00 72.50 60.00 52.50 49.00 47.50 47.14 48.13 50.00 52.50 $45 40 35 30 35 40 45 55 65 75 a. At a product price of $66, will this firm produce in the short run? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? What economic profit or loss will the firm realize per unit of output. b. Answer the questions of 2a assuming product price is $46. Explain in detail. c. Answer the questions of 2a assuming product price is $38. Explain in detail. d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) e. Now assume that there are 1,500…
Quantity Price Total Fixed Costs Variale Cost Total Costs Average Variable Costs Average Total Cost Marginal Cost Total Revenue Marginal Revenue 0 35 25 0 1 35 25 20 2 35 25 25 3 35 25 35 4 35 25 52 5 35 25 80 If this firm produces a quantity of zero units, what is the total profits? What is the firm's marginal cost at a production level of two units? What is the average variable cost at a production level of five units? This firm becomes profitable producing at a quantity of ___ units. The average total cost is smallest at which level of production? At what quantity should this firm produce to maximize their profits based on your calculations? The total costs to produce four units is __________ while the average total cost to produce four units is _________.
Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs (TFC) Costs (TVC) $30.00 $0.00 3. $30.00 $40.00 6. $30.00 $90.00 9. $30.00 $130.00 12 $30.00 $190.00 15 $30.00 $260.00 Refer to Table Cost.EX2. For the 6 units, the average total cost is about O $20.00 O $16.67 O $5.00 $15.00
Table Cost.EX2: Costs and Outputs for a Competitive Firm Total Total Output Fixed Variable (Q) Costs (TFC) Costs (TVC) $40.00 $0.00 $40.00 $40.00 4 $40.00 $90.00 9. $40.00 $130.00 8. $40.00 $190.00 10 $40.00 $260.00 Refer to Table Cost.EX2. For 8 units, the average total cost is about O $23.75 O $26.75 O $30.00 $28.75
37 Total Total Average Average Output Fixed Variable Total Variable Total Marginal (Q) Cost Cost Cost Cost Cost Cost E of 150 $500 $400 $900 $2.67 200 $500 $800 $1,300 $6.50 The table above shows costs for a firm. When Q = 150, Average Total Cost (ATC) is equal to: Select one: а. $3.33 b. $900 c. $6.00 d. $2.67