The market supply in the perfectly competitive market for Ramen noodle bowls is P=8+5Q. In this market, 25 units are bought and sold. Consider the firms who sold goods in this market. What is the maximum value of their Marginal Cost for the goods they sold? Enter a number only, do not include the $ sign.
The market supply in the perfectly competitive market for Ramen noodle bowls is P=8+5Q. In this market, 25 units are bought and sold. Consider the firms who sold goods in this market. What is the maximum value of their Marginal Cost for the goods they sold? Enter a number only, do not include the $ sign.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The market supply in the perfectly competitive market for Ramen noodle bowls is P=8+5Q. In this
market, 25 units are bought and sold. Consider the firms who sold goods in this market. What is the
maximum value of their Marginal Cost for the goods they sold? Enter a number only, do not include
the $ sign.
Correct!
133
prrect Answer
133 margin of error +/- 0.1
Producers will supply the good as long as their marginal cost is the price they will get for their
goods. If the quantity in the market is Q, then supply curve gives us the marginal cost for the
Qth unit sold. Plug the quantity into the supply curve and solve for P. The maximum marginal
cost can be is this P. Anything higher and producer will not bring their goods to the market.
Notice that they sell the good even if Marginal Cost is equal to the price P.
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