QUESTION 20 Study the table below which represents the cost and price schedules facing a perfectly competitive firm that manufactures bulbs. Use this information to answer the question. Quantity of the product 0 1 2 3 4 5 Price per unit (R) 10 10 10 10 10 10 Total revenue (R) 0 10 20 30 40 50 Total profit (R) -10 4 -5 4 4 6 Marginal cost (R) - 9 6 $ 10 13 Average variable cost (R) 9,00 7,50 7,67 8,25 9,20 This perfectly competitive firm will produce a) 3 bulbs, since losses are minimised. b) 4 bulbs, but it will consider shutting down in the short run. c) 4 bulbs, since at this production level it earns normal profit. 4 bulbs and will stay in operation. d)
QUESTION 20 Study the table below which represents the cost and price schedules facing a perfectly competitive firm that manufactures bulbs. Use this information to answer the question. Quantity of the product 0 1 2 3 4 5 Price per unit (R) 10 10 10 10 10 10 Total revenue (R) 0 10 20 30 40 50 Total profit (R) -10 4 -5 4 4 6 Marginal cost (R) - 9 6 $ 10 13 Average variable cost (R) 9,00 7,50 7,67 8,25 9,20 This perfectly competitive firm will produce a) 3 bulbs, since losses are minimised. b) 4 bulbs, but it will consider shutting down in the short run. c) 4 bulbs, since at this production level it earns normal profit. 4 bulbs and will stay in operation. d)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: Monopoly
Section: Chapter Questions
Problem 1PA
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Question
![QUESTION 20
Study the table below which represents the cost and price schedules facing a perfectly competitive firm that
manufactures bulbs. Use this information to answer the question.
Quantity of
the product
0
1
2
3
4
Price per
unit
(R)
10
10
10
10
10
10
c)
d)
38022222
Total
revenue
Total
profit
(R)
-10
-9
-5
-6
Marginal
cost
(R)
.
9
6
8
10
13
Average
variable cost
(R)
9,00
7,50
7,67
8,25
9,20
This perfectly competitive firm will produce
a) 3 bulbs, since losses are minimised.
b)
4 bulbs, but it will consider shutting down in the short run.
4 bulbs, since at this production level it earns normal profit.
4 bulbs and will stay in operation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01148604-49fa-4748-a56e-665f5e33aa44%2Fb7af3c83-16af-49ec-9d43-6acccd642726%2F7j1d0ot.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 20
Study the table below which represents the cost and price schedules facing a perfectly competitive firm that
manufactures bulbs. Use this information to answer the question.
Quantity of
the product
0
1
2
3
4
Price per
unit
(R)
10
10
10
10
10
10
c)
d)
38022222
Total
revenue
Total
profit
(R)
-10
-9
-5
-6
Marginal
cost
(R)
.
9
6
8
10
13
Average
variable cost
(R)
9,00
7,50
7,67
8,25
9,20
This perfectly competitive firm will produce
a) 3 bulbs, since losses are minimised.
b)
4 bulbs, but it will consider shutting down in the short run.
4 bulbs, since at this production level it earns normal profit.
4 bulbs and will stay in operation.
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