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Assume that the cost data in the top table following are for a purely competitive producer. Total Product.....Average Fixed Cost....Average Variable Cost....Avergae Total Cost...Marginal Cost 0..................................................................................................................................................... .....................................................................................................................................................$45 1..........................$60.00...........................$45.00...............................$105.00 .......................................................................................................................................................40 2..........................30.00..............................42.50..................................72.50 .......................................................................................................................................................35 3..........................20.00..............................40.00..................................60.00 .......................................................................................................................................................30 4..........................15.00..............................37.50..................................52.50 .......................................................................................................................................................35 5..........................12.00..............................37.00..................................49.00 .......................................................................................................................................................40 6..........................10.00..............................37.50..................................47.50 .......................................................................................................................................................45 7...........................8.57...............................38.57...................................47.14 .......................................................................................................................................................55 8...........................7.50...............................40.63..................................48.13 .......................................................................................................................................................65 9...........................6.67...............................43.33..................................50.00 .......................................................................................................................................................75 10.........................6.00...............................46.50...................................52.50
a.) At a product price of $56, will this firm produce in the short run? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? What economic profit or loss will the firm realize per unit of output? b.) Answer the questions of (a) assuming product price is $41. c.) Answer the questions of (a) assuming the product price is $32. d.) In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit of loss incurred at each output (column 3) (1)Price................(2)Quantity Supplied, Single Firm...........(3) Profit(+) of Loss(-)................(4)Quantity Supplied 1500 Firms $26 32 38 41 46 56 66
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