At a product price $56.will this firm produce in the short run? why or why not? if it is preferable to produce, what will be the profit maximizing or loss- minimizing output? explain what economic profits or loss will the firm realize per unit of output ? Use MR-MC approach also show economic profit graphically.
At a product price $56.will this firm produce in the short run? why or why not? if it is preferable to produce, what will be the profit maximizing or loss- minimizing output? explain what economic profits or loss will the firm realize per unit of output ? Use MR-MC approach also show economic profit graphically.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Q1:(A) Assume the following cost data are for a purely competitive producer:
total product | average fixed cost | Average variable cost | Average total cost | Marginal cost |
0 | $45 | |||
1 | $60 | $45 | $105 | $40 |
2 | $30 | $42.5 | $72.5 | $35 |
3 | $20 | $40 | $60 | $30 |
4 | $15 | $37.5 | $52.5 | $35 |
5 | $12 | $37 | $49 | $40 |
6 | $10 | $37.5 | $47.5 | $45 |
7 | $8.57 | $38.57 | $47.14 | $55 |
8 | $7.50 | $40.63 | $48.13 | $65 |
9 | $6.67 | $43.33 | $50 | $75 |
10 | $6 | $46.50 | $52.5 |
At a product
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