Suppose that the industry demand curve is given by the following quantity demanded = 100 – 0.5 output. In equilibrium, the market price is equal to 6 pesos per unit.qTRMRTFCTVCTCACAVCAFCMCProfits0 10 1 5 2 3 3 2 4 1 5 2 6 3 7 4 8 5 9 6 10 7 11 8 Assuming that the firm operates in a perfectly competitive market, supply the missing values in the table above. You may use a spreadsheet program to compute the values but must provide a step-by-step explanation of how you arrived at the answers.How much output will the profit maximizing firm produce and how large are its profits? Explain your answer.

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Answered: Suppose that the industry demand curve…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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Suppose that the industry demand curve is given by the following quantity demanded = 100 – 0.5 output. In equilibrium, the market price is equal to 6 pesos per unit.

q	TR	MR	TFC	TVC	TC	AC	AVC	AFC	MC	Profits
0			10
1									5
2									3
3									2
4									1
5									2
6									3
7									4
8									5
9									6
10									7
11									8

Assuming that the firm operates in a perfectly competitive market, supply the missing values in the table above. You may use a spreadsheet program to compute the values but must provide a step-by-step explanation of how you arrived at the answers.
How much output will the profit maximizing firm produce and how large are its profits? Explain your answer.

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