A purely competitive firm finds that the market price for its product is $20.00. It has a fixed cost of $100.00 and a variable cost of $15.00 per unit for the first 50 units and then $25.00 per unit for all successive units. Instructions: Round your answers to 2 decimal places. a. Does price equal or exceed average variable cost for the first 50 units? (Click to select) ♥ What is the average variable cost for the first 50 units? $ b. Does price equal or exceed average variable cost for the first 100 units? (Click to select) - What is the average variable cost for the first 100 units? $ c. What is the marginal cost per unit for the first 50 units? $ per unit. What is the marginal cost for units 51 and higher? $ per unit. d. For each of the first 50 units, does MR exceed MC? (Click to select) v What about for units 51 and higher? (Click to select) v e. What output level will yield the largest possible profit for this purely competitive firm? units.
A purely competitive firm finds that the market price for its product is $20.00. It has a fixed cost of $100.00 and a variable cost of $15.00 per unit for the first 50 units and then $25.00 per unit for all successive units. Instructions: Round your answers to 2 decimal places. a. Does price equal or exceed average variable cost for the first 50 units? (Click to select) ♥ What is the average variable cost for the first 50 units? $ b. Does price equal or exceed average variable cost for the first 100 units? (Click to select) - What is the average variable cost for the first 100 units? $ c. What is the marginal cost per unit for the first 50 units? $ per unit. What is the marginal cost for units 51 and higher? $ per unit. d. For each of the first 50 units, does MR exceed MC? (Click to select) v What about for units 51 and higher? (Click to select) v e. What output level will yield the largest possible profit for this purely competitive firm? units.
Chapter24: Perfect Competition
Section: Chapter Questions
Problem 5E
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Transcribed Image Text:A purely competitive firm finds that the market price for its product is $20.00. It has a fixed cost of $100.00 and a variable cost of
$15.00 per unit for the first 50 units and then $25.00 per unit for all successive units.
Instructions: Round your answers to 2 decimal places.
a. Does price equal or exceed average variable cost for the first 50 units? (Click to select) v
What is the average variable cost for the first 50 units? $ .
b. Does price equal or exceed average variable cost for the first 100 units?
(Click to select) ♥
What is the average variable cost for the first 100 units? $
c. What is the marginal cost per unit for the first 50 units? $
per unit.
What is the marginal cost for units 51 and higher? $
per unit.
d. For each of the first 50 units, does MR exceed MC? (Click to select)
What about for units 51 and higher? (Click to select) v
e. What output level will yield the largest possible profit for this purely competitive firm?
units.
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