The information in the table shows the total demand for water service in Takoma. Assume that there are two companiesoperating in Takoma. Each company that provides these services incurs an annual fixed cost of $400 and that themarginal cost of providing the service to each customer is exactly $2.00. Figures listed are for an annual service contract.Quantity0100200300400500600700800900100011001200Price6055504540353025b.Refer to Table 17-36. Suppose these 2 firms are price competing with each other (as what happens in a perfectlycompetitive market). What would total output be?a.0212501200

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The information in the table shows operating in Takoma. Each compa marginal cost of providing the ser Quantity 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Price 60 55 50 45 40 35 30 25 20 15 10 5 0 Refer to Table 17-36. Suppos competitive market). What wo 0 b. 1200

The information in the table shows operating in Takoma. Each compa marginal cost of providing the ser Quantity 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Price 60 55 50 45 40 35 30 25 20 15 10 5 0 Refer to Table 17-36. Suppos competitive market). What wo 0 b. 1200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The information in the table shows the total demand for water service in Takoma. Assume that there are two companies
operating in Takoma. Each company that provides these services incurs an annual fixed cost of $400 and that the
marginal cost of providing the service to each customer is exactly $2.00. Figures listed are for an annual service contract.
Quantity
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
Price
60
55
50
45
40
35
30
25
b.
Refer to Table 17-36. Suppose these 2 firms are price competing with each other (as what happens in a perfectly
competitive market). What would total output be?
a.
0
21250
1200

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Output 1 2 3 4 5 6 7 8 9 10 AFC $ 300 150 100 75 60 50 43 38 33 30 Multiple Choice AVC $ 100 75 production of 4 units. produce 6 units. shut down. 70 73 80 90 103 119 138 160 The accompanying table shows cost data for a firm that is selling in a purely competitive market. If the market price for the firm's product is $80, the firm will produce 5 units. ATC $ 400 225 170 148 140 140 146 156 171 190 MC $100 50 60 80 110 140 180 230 290 360
7
Question 19 Referring to Figure 1 in Question 14. The firm will shut down in the short run if the price of the good is less than $175. O $125. O $100. O $80.
3. The following questions discuss the relationship between firm decisions, market supply, and market equilibrium in a perfectly competitive market. a. Complete the following table for a company in the short term:
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Explanation it correctly
Hand written solutions are strictly prohibited
In a perfect market the TR and TC create a ___________________breakeven quantity whenever the MC is constant and the potential profit is ___________________________________?
2. The local restaurant owner prepares and sells pizza everyday. The equilibrium price of this pizza is 10 birr. The marginal cost of the restaurant is given as MC = 4 + 0.2Q and assume %3D the restaurant operates under a perfectly competitive market. How many pizzas should be produced per day in order to maximize the profit of restaurant? Gren
Price a aa a Ps PA P3 P2 T P₁ Q₁ 82 (P2-P1) × Q2 (P3-P1) × Q2 (P2-P1) × Q1 (P4-P1) × Q1 S MC la AVC ATC Quantity Refer to the figure. When market price is P₁, which area represents a profit-maximizing firm's losses?
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