Question

In: Economics

Complete the table below and answer the following questions. The price for this perfectly competitive firm...

Complete the table below and answer the following questions. The price for this perfectly competitive firm is $150. A) Should this firm produce? B) If so, how many units should it produce? C) What is the economic profit or economic loss?

QTY FC VC TC AFC AVC ATC MC MR
0 500
1 650
2 700
3 760
4 840
5 950
6 1090
7 1270
8 1500
9 1790
10 2150

Solutions

Expert Solution

We can determine the various cost using the following formula

TC = FC + VC

As we know that when Q = 0, TC = FC

Therefore, here FC = 500

VC = TC - FC

AFC = FC /Q

AVC = VC /Q

ATC = TC/Q = AFC + AVC

Marginal cost is defined as change in total cost over change in Quantity.

In case of perfect competition MR = P

Refer the attached picture for the table

A. Yes the form should produce .

B. The firm should produce 6 units of output.

C. Profit = Total Revenue - Total cost

= 150 × 6 - 1,090

= 900 - 1,090

= - $ 190

So, the firm makes a loss of $ 190.

Please contact if having any query will be obliged to you for your generous support. PleaSe help me it mean a lot to me. Thank you.


Related Solutions

Complete the table and answer the following questions. The price of this perfectly competitive firm is...
Complete the table and answer the following questions. The price of this perfectly competitive firm is $300. QTY FC VC TC AFC AVC ATC MC MR 0 700 1 650 2 700 3 760 4 840 5 950 6 1090 7 1270 8 1500 9 1790 10 2150 Should this firm produce? Explain If so, how many units should it produce? What is the economic profit or economic loss?
The following table shows information for Hayek’s Maps, a perfectly competitive firm. a. Complete the MC...
The following table shows information for Hayek’s Maps, a perfectly competitive firm. a. Complete the MC column in the table: Output TC MC 0 $ 100 / 1 200    2 285    3 355    4 445    5 565    6 715    7 895    8 1,105    b. Given the prices in table below, fill in columns 2, 3, 4 and 5 of table. (Assume that partial units cannot be produced.) If you are entering any...
1. Complete the table given showing the costs of a perfectly competitive firm.
1. Complete the table given showing the costs of a perfectly competitive firm.OutputTotal CostTotal Fixed CostTotal Variable CostAverage Fixed CostAverage Variable CostAverage Total CostMarginal cost1003601602000.33000.834001.3050046060037001.680022402. If the market price is Rs 3,what will be the profit/ loss of the firm?
12.The table below shows cost data for a firm operating in a perfectly competitive market: Price...
12.The table below shows cost data for a firm operating in a perfectly competitive market: Price ($ per unit) Quantity (units) Total cost ($) 50.00 0 10.00 50.00 1 20.00 50.00 2 27.50 50.00 3 77.50 50.00 4 147.50 50.00 5 250.00 What is the firm’s total revenue when four units are produced? $160 $50 $200 $40 14.If a perfectly competitive firm is earning positive profits, then its average total cost must be higher than the market price. its total...
QUESTION 11 In the short-run, if a perfectly competitive firm is producing at a price below...
QUESTION 11 In the short-run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is positive. zero. negative. positive, zero, or negative. QUESTION 12 Assume that a firm's marginal revenue barely exceeds marginal cost. To maximize profit, teh firm should: expand output. contract output. maintain output. there is insufficient information to answer the question. QUESTION 13 In the short run, a perfectly competitive firm will stay in business as long as: Price...
The perfectly competitive firm should produce in the a. short run if price is below average...
The perfectly competitive firm should produce in the a. short run if price is below average variable cost. b. long run if price is below average variable cost. c. short run if price is below average total cost but above average variable cost. d. long run if price is below average total cost but above average variable cost. d. long run if price is below average total cost but above average variable cost.
Equilibrium price is $10 in a perfectly competitive market. For a perfectly competitive firm, MR=MC at...
Equilibrium price is $10 in a perfectly competitive market. For a perfectly competitive firm, MR=MC at 1200 units of output. At 1200 units, atc is $23 and avc is $18. The best policy for this firm is to ___ in the short run. Also, this firm earns ___ of ___ if it produces and sells 1200 units. a.shut down, losses, 15,600 b.shut down, losses, 9,600 c.continue to produce, losses, $15,600 d.continue to produce, profits, $15,600 Ultimately, market supply curves are...
In a perfectly competitive market structure, a competitive firm has the given price as a price...
In a perfectly competitive market structure, a competitive firm has the given price as a price taker and, therefore, its price is equal to its MR shown on the same demand curve as the perfectly elastic demand curve. On the other hand, a monopoly firm has a downward sloping demand curve and its equilibrium price is always larger than MR (P>MR). Briefly explain why? Use both equation and diagram.
Draw the following: (a) a perfectly competitive firm that earns profits (b) a perfectly competitive firm...
Draw the following: (a) a perfectly competitive firm that earns profits (b) a perfectly competitive firm that incurs losses, but will continue to operate (c) a perfectly competitive firm that incurs losses and will shut down in the short-run.
Which of the following statement is TRUE? a) A perfectly competitive firm is a price SETTER,...
Which of the following statement is TRUE? a) A perfectly competitive firm is a price SETTER, while a monopoly is a price TAKER b) A perfectly competitive firm faces market demand, while a monopoly faces a perfectly elastic demand c) Both monopoly and perfectly competitive firm faces market demand d) Both monopoly and perfectly competitive firm should produce at output level where marginal revenue = marginal cost
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT