D) Assume that the firm's minimum average variable cost is £6.5. Should the firm continue operating in the market in the short run? In the long run? Explain. E) If the firm is typical of other firms in the market, what price will it charge in the long run? Explain.

D) Assume that the firm's minimum average variable cost is £6.5. Should the firm continue operating in the market in the short run? In the long run? Explain. E) If the firm is typical of other firms in the market, what price will it charge in the long run? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Table 1 shows the total cost schedule for a competitive firm. Price per unit of output is £7.
Quantity
0
1
2
3
4
5
6
7
8
Total Cost
15
25
30
34
38
45
55
70
100
Table 1
D) Assume that the firm's minimum average variable cost is £6.5. Should the firm
continue operating in the market in the short run? In the long run? Explain.
E) If the firm is typical of other firms in the market, what price will it charge in the
long run? Explain.

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