Assume a single firm in a purely competitive industry has variable costs as indicated in the following table in column 2. Complete the table and answer the questions. (3) Total (1) Total product (2) Total (4) (5) (6) (7) var. cost cost AFC AVC ATC MC 0 $ 0 $ 40 1 55 2 75 3 90 4 110 5 135 6 170 7 220 8 290 (a) At a product price of $52, will this firm produce in the short run? Explain. What will its profit or loss be? (b) At a product price of $28, will this firm produce in the short run? Explain. What will its profit or loss be? (c) At a product price of $22, will this firm produce in the short run? Explain. What will its profit or loss be? (d) firm. Product price $72 Complete the following short-run supply schedule for this Quantity supplied Profit or loss 725825 45 15
Assume a single firm in a purely competitive industry has variable costs as indicated in the following table in column 2. Complete the table and answer the questions. (3) Total (1) Total product (2) Total (4) (5) (6) (7) var. cost cost AFC AVC ATC MC 0 $ 0 $ 40 1 55 2 75 3 90 4 110 5 135 6 170 7 220 8 290 (a) At a product price of $52, will this firm produce in the short run? Explain. What will its profit or loss be? (b) At a product price of $28, will this firm produce in the short run? Explain. What will its profit or loss be? (c) At a product price of $22, will this firm produce in the short run? Explain. What will its profit or loss be? (d) firm. Product price $72 Complete the following short-run supply schedule for this Quantity supplied Profit or loss 725825 45 15
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Assume a single firm in a purely competitive industry has variable costs as
indicated in the following table in column 2.
Complete the table and answer the questions.
(3)
Total
(1)
Total
product
(2)
Total
(4)
(5)
(6)
(7)
var. cost
cost
AFC
AVC
ATC
MC
0
$ 0
$ 40
1
55
2
75
3
90
4
110
5
135
6
170
7
220
8
290
(a) At a product price of $52, will this firm produce in the short run?
Explain. What will its profit or loss be?
(b) At a product price of $28, will this firm produce in the short run?
Explain. What will its profit or loss be?
(c) At a product price of $22, will this firm produce in the short run?
Explain. What will its profit or loss be?
(d)
firm.
Product
price
$72
Complete the following short-run supply schedule for this
Quantity
supplied
Profit
or loss
725825
45
15
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