Question 5: Perfect CompetitionUse the cost schedule below to answer the following questions about a price-taking firm whoproduces discrete units (there cannot be a half-computer in this world). ATC is averagetotal cost, AVC is average variable cost and AFC is average fixed cost.Computers per DayFixed CostVariable CostTotal CostMarginal CostАТСAVCAFCPrice$30$0$351$30$20$30$303$30$404$30$60$30$906.$30$1307$30$1808$30$240$30$31010$30$3901. Fill out the schedule above.2. Given the price information you've received, how many computers/day will the firmproduce? What will be the economic profit (or loss) this firm receives?3. If the firm is making a positive profit, do you expect it to persist in the long run? Why?

1) Total Cost = Total Fixed Cost + Total Variable CostMarginal Cost = (Total Cost)n - (Total…

Question 5: Perfect Competition Use the cost schedule below to answer the following questions about a price-taking firm who produces discrete units (there cannot be a half-computer in this world). ATC is average total cost, AVC is average variable cost and AFC is average fixed cost. Computers per Day Fixed Cost Variable Cost Total Cost Marginal Cost ATC AVC AFC Price $30 $0 $35 1 $30 $20 2 $30 $30 3 $30 $40 4 $30 $60 $30 $90 $30 $130 $30 $180 8 $30 $240 $30 $310 10 $30 $390 1. Fill out the schedule above. 2. Given the price information you've received, how many computers/day will the firm produce? What will be the economic profit (or loss) this firm receives? 3. If the firm is making a positive profit, do you expect it to persist in the long run? Why?

Question 5: Perfect Competition Use the cost schedule below to answer the following questions about a price-taking firm who produces discrete units (there cannot be a half-computer in this world). ATC is average total cost, AVC is average variable cost and AFC is average fixed cost. Computers per Day Fixed Cost Variable Cost Total Cost Marginal Cost ATC AVC AFC Price $30 $0 $35 1 $30 $20 2 $30 $30 3 $30 $40 4 $30 $60 $30 $90 $30 $130 $30 $180 8 $30 $240 $30 $310 10 $30 $390 1. Fill out the schedule above. 2. Given the price information you've received, how many computers/day will the firm produce? What will be the economic profit (or loss) this firm receives? 3. If the firm is making a positive profit, do you expect it to persist in the long run? Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...

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A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
At what level of output is average cost a minimum? What is the average cost (AC) at that output? What is the Marginal Cost (MC) at that output?
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A computer company produces affordable, easyto-use home computer systems and has fixed costs of$250. The marginal cost of producing computers is $700for the first computer, $250 for the second, $300 for thethird, $350 for the fourth, $400 for the fifth, $450 for thesixth, and $500 for the seventh.a. Create a table that shows the company’s output,total cost, marginal cost, average cost, variablecost, and average variable cost.b. At what price is the zero-profit point? At whatprice is the shutdown point?c. If the company sells the computers for $500, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.d. If the firm sells the computers for $300, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.