A perfectly competitive firm produces good X and has the following weekly cost data. ( Q = total output; TFC = total fixed cost; TVC = total variable cost): Q (units) TFC ($) TVC $ TC ($) ATC $ AVC $ MC $ 0 0 120 1 172 2 219 3 261 4 300 5 342 6 389 7 441 8 499 9 565 10 641 (a) Complete the above table. Round off values to the nearest two decimal places.
A
( Q = total output; TFC = total fixed cost; TVC = total variable cost):
|
Q (units) |
TFC ($) |
TVC $ |
TC ($) |
|
|
MC $ |
|
0 |
0 |
120 |
|
|
|
|
|
1 |
|
|
172 |
|
|
|
|
2 |
|
|
219 |
|
|
|
|
3 |
|
|
261 |
|
|
|
|
4 |
|
|
300 |
|
|
|
|
5 |
|
|
342 |
|
|
|
|
6 |
|
|
389 |
|
|
|
|
7 |
|
|
441 |
|
|
|
|
8 |
|
|
499 |
|
|
|
|
9 |
|
|
565 |
|
|
|
|
10 |
|
|
641 |
|
|
|
(a) Complete the above table. Round off values to the nearest two decimal places.
(b) For each of the following prices determine this firm’s profit- maximising (or loss-minimising) output per week in the short run, and calculate the weekly profit or loss. Show your calculations (to two decimal places).
(b.i) $42.50
(b.ii) $47.50
(b.iii) $52.50
(b.iv) $72.00
(c) Assume that in a particular perfectly competitive market, firms are making losses. Explain the long run adjustments process of the market returning to its long run position.
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