Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? | firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,80O. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine this industry's market structure? No
Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? | firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,80O. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine this industry's market structure? No
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 14CQ
Related questions
Question
![Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the
following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a
normal profit.
Output
TC
MC
ATC
50,800
$170,000
$0.60
100,800
220,000
1.10
150,800
257,500
1.71
200,800
365,500
2.45
Instructions: Enter your answers rounded to two decimal places.
a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above.
b. Are there economies of scale in production?
Yes
c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is
301,600,000 bottles. How many firms will be in this industry?
firm(s)
d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this
industry?
firm(s)
e. Review your answers to parts b, c, and d. Does the level of demand determine this industry's market structure?
No](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0e5bb277-d100-4e34-89bd-43f13cf2ce75%2Fbf56ae70-0f01-4270-b15d-6cb382b42f45%2Fijbmav_processed.png&w=3840&q=75)
Transcribed Image Text:Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the
following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a
normal profit.
Output
TC
MC
ATC
50,800
$170,000
$0.60
100,800
220,000
1.10
150,800
257,500
1.71
200,800
365,500
2.45
Instructions: Enter your answers rounded to two decimal places.
a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above.
b. Are there economies of scale in production?
Yes
c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is
301,600,000 bottles. How many firms will be in this industry?
firm(s)
d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this
industry?
firm(s)
e. Review your answers to parts b, c, and d. Does the level of demand determine this industry's market structure?
No
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