A profit-maximizing firm in a competitive industry has the cost structure shown in the table below. Quantity Average Total Cost Average Fixed Cost Marginal Cost 1_ 25.00 20.00 4.20 2 14.40 10.00 3.60 3 10.87 6.67 4.20 4 9.40 5.00 6.00 5 9.00 4.00 9.00 6 9.33 3.33 13.20 7 10.26 2.86 18.60 8 11.70 2.50 25.20 9 13.62 2.22 33.00 10 16.00 2.00 42.00 Calculate this firm's shut-down price and explain your answer. What is this firm's supply curve? In answering this question, indicate the minimum price necessary for the firm to produce a positive quantity and the quantity it would produce at that minimum price? (Hint: Draw on your answer to part a.) If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.
A profit-maximizing firm in a competitive industry has the cost structure shown in the table below. Quantity Average Total Cost Average Fixed Cost Marginal Cost 1_ 25.00 20.00 4.20 2 14.40 10.00 3.60 3 10.87 6.67 4.20 4 9.40 5.00 6.00 5 9.00 4.00 9.00 6 9.33 3.33 13.20 7 10.26 2.86 18.60 8 11.70 2.50 25.20 9 13.62 2.22 33.00 10 16.00 2.00 42.00 Calculate this firm's shut-down price and explain your answer. What is this firm's supply curve? In answering this question, indicate the minimum price necessary for the firm to produce a positive quantity and the quantity it would produce at that minimum price? (Hint: Draw on your answer to part a.) If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
A profit-maximizing firm in a competitive industry has the cost structure shown in the table below.
|
Quantity |
Average Total Cost |
Average Fixed Cost |
Marginal Cost |
|
1_ |
25.00 |
20.00 |
4.20 |
|
2 |
14.40 |
10.00 |
3.60 |
|
3 |
10.87 |
6.67 |
4.20 |
|
4 |
9.40 |
5.00 |
6.00 |
|
5 |
9.00 |
4.00 |
9.00 |
|
6 |
9.33 |
3.33 |
13.20 |
|
7 |
10.26 |
2.86 |
18.60 |
|
8 |
11.70 |
2.50 |
25.20 |
|
9 |
13.62 |
2.22 |
33.00 |
|
10 |
16.00 |
2.00 |
42.00 |
- Calculate this firm's shut-down price and explain your answer.
- What is this firm's supply curve? In answering this question, indicate the minimum price necessary for the firm to produce a positive quantity and the quantity it would produce at that minimum price? (Hint: Draw on your answer to part a.)
- If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.
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Follow-up Question
- What is this firm's supply curve? In answering this question, indicate the minimum
price necessary for the firm to produce a positive quantity and the quantity it would produce at that minimum price? (Hint: Draw on your answer to part a.)
Solution
by Bartleby ExpertFollow-up Question
- What is this firm's supply curve? In answering this question, indicate the minimum
price necessary for the firm to produce a positive quantity and the quantity it would produce at that minimum price? (Hint: Draw on your answer to part a.)
Solution
by Bartleby ExpertFollow-up Question
- If marginal revenue is $9, how much output will the firm produce, and how much profit will it make? Show your calculations.
Solution
by Bartleby ExpertKnowledge Booster
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