8. Assume a single firm in a purely competitive industryhas the following costs:(1)TotalProduct0123458796(2) (3) (4) (5) (6)TVCTCAFCAVC ATCPO P 40557590110135170220290(7)MC95P40.00 P55.00 P95.00P55.0011520.00 37.5057.5020.0013013.3330.0043.3315.00150 10.0027.5037.5020.001758.00 27.00 35.0025.00210 6.6728.33 35.0035.002605.7131.43 37.14 50.00330 5.00 36.25 41.25 70.008a) At a product price of P52, will this firmproduce in the short run? Explain. What will itsprofit or loss be?8b) At a product price of P28, will this firmproduce in the short run? Explain. What will itsprofit or loss be?8c) At a product price of P22, will this firmproduce in the short run? Explain. What will itsprofit or loss be?

A perfectly competitive firm is a price taker, which means it takes the price set by the market…

Answered: Assume a single firm in a purely…

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Assume a single firm in a purely competitive industry has the following costs:

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 4MC

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Question

8. Assume a single firm in a purely competitive industry
has the following costs:
(1)
Total
Product
0
1
2
3
4
5
879
6
(2) (3) (4) (5) (6)
TVC
TC
AFC
AVC ATC
PO P 40
55
75
90
110
135
170
220
290
(7)
MC
95
P40.00 P55.00 P95.00
P55.00
115
20.00 37.50
57.50
20.00
130
13.33
30.00
43.33
15.00
150 10.00
27.50
37.50
20.00
175
8.00 27.00 35.00
25.00
210 6.67
28.33 35.00
35.00
260
5.71
31.43 37.14 50.00
330 5.00 36.25 41.25 70.00
8a) At a product price of P52, will this firm
produce in the short run? Explain. What will its
profit or loss be?
8b) At a product price of P28, will this firm
produce in the short run? Explain. What will its
profit or loss be?
8c) At a product price of P22, will this firm
produce in the short run? Explain. What will its
profit or loss be?

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