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Assume that the cost data in the following table are for a purely competitive producer: Average Average Fixed Average Total Total Variable Marginal Product Cost Cost Cost Cost $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8. 7.50 40.63 48.13 55.00 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00

Assume that the cost data in the following table are for a purely competitive producer: Average Average Fixed Average Total Total Variable Marginal Product Cost Cost Cost Cost $60.00 $45.00 $105.00 $45.00 2 30.00 42.50 72.50 40.00 3 20.00 40.00 60.00 35.00 4 15.00 37.50 52.50 30.00 12.00 37.00 49.00 35.00 6 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8. 7.50 40.63 48.13 55.00 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that the cost data in the following table are for a purely competitive producer: Average Fixed Average Variable Average Total Total Marginal Product Cost Cost Cost Cost 1 $60.00 $45.00 $105.00 $45.00 30.00 42.50 72.50 40.00 20.00 40.00 60.00 35.00 4. 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $66.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Profit-maximizing output = 9 O units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 16 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Loss-minimizing O output = 6. units per firm (iii) What economic profit or loss will the firm realize per unit of output? Loss O per unit = $ 39 8 C. At a product price of $32.00 (i) Will this firm produce in the short run? No (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Not applicable O output = O O units per firm (iii) What economic profit or loss will the firm realize per unit of output? Total loss per unit = $ 82 8 Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3).
Transcribed Image Text:Assume that the cost data in the following table are for a purely competitive producer: Average Fixed Average Variable Average Total Total Marginal Product Cost Cost Cost Cost 1 $60.00 $45.00 $105.00 $45.00 30.00 42.50 72.50 40.00 20.00 40.00 60.00 35.00 4. 15.00 37.50 52.50 30.00 5 12.00 37.00 49.00 35.00 10.00 37.50 47.50 40.00 7 8.57 38.57 47.14 45.00 8 7.50 40.63 48.13 55.00 9 6.67 43.33 50.00 65.00 10 6.00 46.50 52.50 75.00 Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Select "Not applicable" and enter a value of "0" for output if the firm does not produce. a. At a product price of $66.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Profit-maximizing output = 9 O units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 16 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Loss-minimizing O output = 6. units per firm (iii) What economic profit or loss will the firm realize per unit of output? Loss O per unit = $ 39 8 C. At a product price of $32.00 (i) Will this firm produce in the short run? No (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Not applicable O output = O O units per firm (iii) What economic profit or loss will the firm realize per unit of output? Total loss per unit = $ 82 8 Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3).
X Answer is complete but not entirely correct. (1) (2) (3) (4) Quantity Supplied, Single Firm Quantity Profit (+) or Loss (-) Supplied, 1,500 Firms Price $22.00 0.00 -60.00 0.00 27.00 0.00 -60.00 0.00 32.00 0.00 -60.00 0.00 38.00 5.00 -55.00 7,500.00 43.00 6.00 -39.00 9,000.00 47.00 7.00 -8.00 10,500.00 57.00 8.00 -63.00 12,000.00 e. Now assume that there are 1,500 identical firms in this competitive industry. That is, there are 1,500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4 in the table above). f. Suppose the market demand data for the product are as follows: Total Quality Demanded Price $22.00 19,000 27.00 17,000 32.00 15,000 38.00 13,500 43.00 12,000 47.00 10,500 57.00 9,500 What is the equilibrium price? $ 47 O What is the equilibrium output for the industry? 10500 units For each firm? 7 O units Instructions: Enter your answers rounded to two decimal places. Enter positive values for profit or loss. What will profit or loss be per unit? Loss O per unit = $ 1.14 8 Per firm? $ Will this industry expand or contract in the long run? Contract
Transcribed Image Text:X Answer is complete but not entirely correct. (1) (2) (3) (4) Quantity Supplied, Single Firm Quantity Profit (+) or Loss (-) Supplied, 1,500 Firms Price $22.00 0.00 -60.00 0.00 27.00 0.00 -60.00 0.00 32.00 0.00 -60.00 0.00 38.00 5.00 -55.00 7,500.00 43.00 6.00 -39.00 9,000.00 47.00 7.00 -8.00 10,500.00 57.00 8.00 -63.00 12,000.00 e. Now assume that there are 1,500 identical firms in this competitive industry. That is, there are 1,500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4 in the table above). f. Suppose the market demand data for the product are as follows: Total Quality Demanded Price $22.00 19,000 27.00 17,000 32.00 15,000 38.00 13,500 43.00 12,000 47.00 10,500 57.00 9,500 What is the equilibrium price? $ 47 O What is the equilibrium output for the industry? 10500 units For each firm? 7 O units Instructions: Enter your answers rounded to two decimal places. Enter positive values for profit or loss. What will profit or loss be per unit? Loss O per unit = $ 1.14 8 Per firm? $ Will this industry expand or contract in the long run? Contract
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