A firm in a perfectly competitive market uses only workers to produce output. The relationship between the number of workers and the amount of output is given in the table attached. Suppose the wage paid to a worker is $100, and the firm has fixed costs of $500. a. Complete the table by filling in marginal product (MP), variable cost (VC), total cost (TC), and marginal cost (MC). b.Suppose the price of the good they produce is $25. What quantity does this firm produce in the short run? What are its profits? Show your work and explain your answer. c. Is the market in long-run equilibrium? Explain. If it is not, explain what will happen to the price in the market and the quantity produced by each firm as the market transitions to long-run equilibrium.
A firm in a
a. Complete the table by filling in marginal product (MP), variable cost (VC), total cost (TC), and marginal cost (MC).
b.Suppose the price of the good they produce is $25. What quantity does this firm produce in the short run? What are its profits? Show your work and explain your answer.
c. Is the market in long-run equilibrium? Explain. If it is not, explain what will happen to the price in the market and the quantity produced by each firm as the market transitions to long-run equilibrium.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
