(What’s So Perfect About Perfect Competition) Use the following data to answer the questions. Marginal Marginal Quantity Cost Benefit 0 — — 1 $ 2 $10 2 $ 3 $ 9 3 $ 4 $ 8 4 $ 5 $ 7 5 $ 6 $ 6 6 $ 8 $ 5 7 $10 $ 4 8 $12 $ 3 a. For the product shown, assume that the minimum point of each firm’s average variable cost curve is at $2. Construct a demand and supply diagram for the product and indicate the equilibrium price and quantity. b. on the graph, label the area of consumer surplus as f. Label the area of producer surplus as g. c. If the equilibrium price were $2, what would be the amount of producer surplus?
(What’s So Perfect About Perfect Competition) Use the following data to answer the questions. Marginal Marginal Quantity Cost Benefit 0 — — 1 $ 2 $10 2 $ 3 $ 9 3 $ 4 $ 8 4 $ 5 $ 7 5 $ 6 $ 6 6 $ 8 $ 5 7 $10 $ 4 8 $12 $ 3 a. For the product shown, assume that the minimum point of each firm’s average variable cost curve is at $2. Construct a demand and supply diagram for the product and indicate the equilibrium price and quantity. b. on the graph, label the area of consumer surplus as f. Label the area of producer surplus as g. c. If the equilibrium price were $2, what would be the amount of producer surplus?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
(What’s So Perfect About
following data to answer the questions.
Marginal Marginal
Quantity Cost Benefit
0 — —
1 $ 2 $10
2 $ 3 $ 9
3 $ 4 $ 8
4 $ 5 $ 7
5 $ 6 $ 6
6 $ 8 $ 5
7 $10 $ 4
8 $12 $ 3
a. For the product shown, assume that the minimum point
of each firm’s
indicate the
b. on the graph, label the area of
Label the area of
c. If the equilibrium price were $2, what would be the
amount of producer surplus?
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