Suppose that each firm in a competitive industry has the following costs:Total Cost: TC = 50+ 1/2q²Marginal Cost: MC = qwhere 9 is an individual firm's quantity produced.The market demand curve for this product is:Demand D = 160 - 4Pwhere P is the price and is the total quantity of the good.Each firm's fixed cost is $What is each firm's variable cost?50+ 1/1/1919²129 Complete the following table by computing the total cost and average total cost for each quantity produced.Quantity Total Cost Average Total Cost(Pies)(Dollars)(Dollars)123456The price of a pie is now $11.At a price of $11,a profit of $True or False: The market is in long-run equilibrium.Truepies are sold in the market. Each producer makesFalseSuppose that in the long run there is free entry and exit.In the long run, each producer earns a profit of $producer makespies, so there areThe market price is $producers operating.pies, so there areAt this price,producers in this market, each makingpies are sold in this market, and each The market for apple pies in the city of Ectenia is competitive and has the following demand schedule:5678910115621213Each producer in the market has a fixed cost of $9 and the following marginal cost:Quantity(Pies)12348007006005004003002001000Marginal Cost(Dollars)24681012ky

Introduction of concept: Firm total cost is equal to the sum of fixed cost and the variable cost. The fixed cost of the firm is independent of the level of output. Fixed costs remain the same for a period of time. For example in the short run, inputs such as capital are fixed so the rent of this fixed capital is fixed cost. The variable cost depends on the level of output produced. Variable cost changes when output changes. Average total cost is the total cost per unit of output. Note: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts for you. To get the remaining sub-part solved please repost the complete question and mention the sub-parts to be solved.” Given Total cost function: TC=50+12q2 ......(1)Part a: Fixed cost is the cost at q =0 at q=0, TC(0)=50+12(0)2 TC(0)=50So fixed cost is $50 The fixed cost is $50Part b: Since Total cost = Fixed cost +variable cost So variable cost = Total cost - fixed cost VC=50+12q2-50VC=12q2 Each firm's variable cost is 12q2Part c: Total cost for q=1 TC(1)=50+12(1)2 TC(1)=$50.5 Average total cost for q=1, ATC=50.5/1 =$50.5 Total cost for q=2: TC(2)=50+1222TC(2)=$52 Average total cost for q=2, is $52/2=$26 And so on... Quantity q Total cost TC Average total cost ATC 1 50.5 50.5 2 52 26 3 54.5 18.16667 4 58 14.5 5 62.5 12.5 6 68 11.33333

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Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+ 19² Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is: Demand QD = 160 - 4P where P is the price and is the total quantity of the good. Each firm's fixed cost is What is each firm's variable cost? ○ 50+ / 9 19² O q

Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+ 19² Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is: Demand QD = 160 - 4P where P is the price and is the total quantity of the good. Each firm's fixed cost is What is each firm's variable cost? ○ 50+ / 9 19² O q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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