Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costsare as follows:Output perDayTotal CostVariable CostАТСAVCMC$1.0012.501.502.501.501.53.502.501.751.25134.203.201.401.0670.744.503.501.1250.8750.35.204.201.040.840.76.805.801.330.971.678.707.701.241.11.9810.709.701.341.21If the current equilibrium price in the pencil market is $1, how many pencils will Francesproduce, what price will she charge, and how much profit (or loss) will she make?

Perfect competition is the market form which is characterized by a large number of buyers and…

Answered: If the current equilibrium price in the…

If the current equilibrium price in the pencil market is $1, how many pencils will Frances produce, what price will she charge, and how much profit (or loss) will she make?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 8SCQ: Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are...

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Question

Frances sells pencils in the perfectly competitive pencil market. Her output per day and her costs
are as follows:
Output per
Day
Total Cost
Variable Cost
АТС
AVC
MC
$1.00
1
2.50
1.50
2.50
1.50
1.5
3.50
2.50
1.75
1.25
1
3
4.20
3.20
1.40
1.067
0.7
4
4.50
3.50
1.125
0.875
0.3
5.20
4.20
1.04
0.84
0.7
6.80
5.80
1.33
0.97
1.6
7
8.70
7.70
1.24
1.1
1.9
8
10.70
9.70
1.34
1.21
If the current equilibrium price in the pencil market is $1, how many pencils will Frances
produce, what price will she charge, and how much profit (or loss) will she make?

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