A firm has short-run costs such that the lowest average variable cost it has for any quantity supplied greater than zero (i.e. for Qs > 0) is $10 a unit. The lowest average total cost (in the short-run) for any quantity supplied is $14 a unit. That is, $10 and $14 describe the height of the AVC curve and ATC curve at their respective minimums. Suppose the firm is in a perfectly competitive market. a. What is the marginal revenue of a unit at the market price of P? b. What is the average revenue at the market price of P?

A firm has short-run costs such that the lowest average variable cost it has for any quantity supplied greater than zero (i.e. for Qs > 0) is $10 a unit. The lowest average total cost (in the short-run) for any quantity supplied is $14 a unit. That is, $10 and $14 describe the height of the AVC curve and ATC curve at their respective minimums. Suppose the firm is in a perfectly competitive market. a. What is the marginal revenue of a unit at the market price of P? b. What is the average revenue at the market price of P?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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