MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Chapter 13, Problem 5QE
To determine

Calculate the quantity produced by the firm.

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Isabella grows pumpkins. Her average variable cost (AVC), average total cost (ATC), and marginal cost (MC) of production are illustrated in the figure to the right. Assume the market for pumpkins is perfectly competitive and that the market price is $5.00 per box. How many pumpkins should Isabella grow? Isabella should produce integer value.) thousand boxes of pumpkins. (Enter your response as an Price ($ per box) 10.00- MG ATC AVC 9.00- a 8.00- G 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 3 5 6. Quantity (boxes in thousands)
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Assume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. It may help to create your own cost table and fill in columns for Marginal Cost and Average Total Cost based on the Total Cost information below.  a.What is the level of profit for this firm at the profit maximizing output?  b.To convince yourself that the quantity you found is indeed the profit maximizing quantity, try calculating what the profit would be at the next higher level of output. What did you find?  c. What do you predict will happen in this market over the long run?
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