In: Economics
a) Zena produces fresh flowers. She faces a perfectly competitive market. The table below presents her cost schedule. Complete the table by calculating marginal cost (MC).(1 mark)
Output(boxes) |
Total Cost(TC) |
Marginal cost(MC=∆TC/∆Q) |
0 |
$100 |
|
10 |
190 |
|
20 |
250 |
|
30 |
360 |
|
40 |
490 |
|
50 |
640 |
b) If the market price of a box of fresh flower is $13, how much output will the firm produce to maximize the profit. Calculate her profit at that level of output. Show your work
c) Draw and discuss the major differences between the demand curve faced by a firm in perfectly competitive market and a firm in monopoly market.(2 mark)