Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market. Output Fixed AFC Variable AVC Total ATC MC Cost Cost cost 1 $50 50/1=50 $30 30/1=30 30+50=80 80/1=80 NA 2 $50 50/2=25 $50 50/2=25 50+50=100 100/2=50 (100-80)/(2-1)=20 3 $50 50/3=16.67 $80 80/3=26.67 50+80=130 130/3=43.33 (130-100)/(3-2)=30 4 $50 50/4=12.50 $120 120/4=30 50+120=170 170/4=42.50 (170-130)/(4-3)=40 5 $50 50/5=10 $170 170/5=34 50+170=220 220/5=44 (220-170)/(5-4) =50 What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?
Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a perfectly competitive market. Output Fixed AFC Variable AVC Total ATC MC Cost Cost cost 1 $50 50/1=50 $30 30/1=30 30+50=80 80/1=80 NA 2 $50 50/2=25 $50 50/2=25 50+50=100 100/2=50 (100-80)/(2-1)=20 3 $50 50/3=16.67 $80 80/3=26.67 50+80=130 130/3=43.33 (130-100)/(3-2)=30 4 $50 50/4=12.50 $120 120/4=30 50+120=170 170/4=42.50 (170-130)/(4-3)=40 5 $50 50/5=10 $170 170/5=34 50+170=220 220/5=44 (220-170)/(5-4) =50 What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
- Cost figures for a hypothetical firm are given in the following table. Use them for the exercises below. The firm is selling in a
perfectly competitive market.
|
Output |
Fixed |
AFC |
Variable |
|
Total |
|
MC |
|
|
Cost |
|
Cost |
|
cost |
|
|
|
1 |
$50 |
50/1=50 |
$30 |
30/1=30 |
30+50=80 |
80/1=80 |
NA |
|
2 |
$50 |
50/2=25 |
$50 |
50/2=25 |
50+50=100 |
100/2=50 |
(100-80)/(2-1)=20 |
|
3 |
$50 |
50/3=16.67 |
$80 |
80/3=26.67 |
50+80=130 |
130/3=43.33 |
(130-100)/(3-2)=30 |
|
4 |
$50 |
50/4=12.50 |
$120 |
120/4=30 |
50+120=170 |
170/4=42.50 |
(170-130)/(4-3)=40 |
|
5 |
$50 |
50/5=10 |
$170 |
170/5=34 |
50+170=220 |
220/5=44 |
(220-170)/(5-4) =50 |
What can you expect from an industry in perfect competition in the long run? That is, what will the price be? What quantity will be produced? What will be the relation between marginal cost, average cost, and price?
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