A perfectly competitive industry is composed of 100 identical firms with cost structure: q TC VC FC AVC ATC MC 0 4 1 8 2 10 3 14 4 20 5 28 6 38 b) Assuming that the market price is p = 8, what are the quantity produced by each firm and the profit it makes?
A
q TC VC FC
0 4
1 8
2 10
3 14
4 20
5 28
6 38
b) Assuming that the market price is p = 8, what are the quantity produced by each firm and the profit it makes?
![](/static/compass_v2/shared-icons/check-mark.png)
The variable cost can be calculated by using the below formula:
If Q is 1 and TC is 8, then the variable cost can be calculated by using equation (1) as follows:
The average variable cost can be calculated by using the below formula:
If Q is 1 and VC is 4, then the average variable cost can be calculated by using equation (2) as follows:
The average total cost can be calculated by using the below formula:
If Q is 1 and TC is 8, then the average total cost can be calculated by using equation (3) as follows:
Marginal cost can be calculated by using the below formula:
If Q is 1, then the marginal cost can be calculated by using equation (4) as follows:
Step by step
Solved in 4 steps with 10 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)