A perfectly competitive firm faces a market-determined price of $30 for its product. Fill in columns...

A perfectly competitive firm faces a market-determined price of $30 for its product. Fill in columns and answer the question below.

(1)	(2)	(3)	(4)	(5)	(6)	(7)
Quantity	Total cost	Average total cost	Marginal cost	Marginal revenue	Profit margin	Total profit
0	$1,500
150	$4,000
300	$6,600
450	$9,600
600	$14,000
750	$19,200

The competitive firm should produce _____ units to maximize profit.

Expert Solution

Quantity	Total cost	Average total cost = Total Cost/Quantity	Marginal cost = Change in TC/Change in Quantity	Total Revenue = Q*P	Marginal revenue= Change in TR/Change in Q	Profit margin =(Total profit/Total Revenue)*100	Total profit=TR-TC
0	1,500
150	4,000	26.67	16.67	4500	30	11.11	500
300	6,600	22.00	17.33	9000	30	26.67	2,400
450	9,600	21.33	20.00	13500	30	28.89	3,900
600	14,000	23.33	29.33	18000	30	22.22	4,000
750	19,200	25.60	34.67	22500	30	14.67	3,300

The firm should produce 600 units to maximise profit.

Rahul Sunny answered 3 years ago

A perfectly competitive firm faces a market-determined price of $25 for its product.

A perfectly competitive firm faces a market-determined price of $25 for its product.(1) (2) (3) (4) (5) (6) (7)QuantityTotal costAverage total costMarginal costMarginal revenueProfit margin0 1000 100 2000 200 3300 300 4800 400 7000 500 9600a. The firm’s total costs are given in the schedule above. Fill in columns 3 and 4 for average total cost and marginal cost. b. Fill in columns 5 and 6 for marginal revenue and profit margin. c. How much output should the competitive firm...

This is a firm in a perfectly competitive market. The selling price is $5. Fill in...

This is a firm in a perfectly competitive market. The selling price is $5. Fill in the table below and enter the answers to the questions down below: 1-How many units should be produced? 2- What will be the profit per unit? 3- What will be the total profit? 4- If the price were to drop to $4 how many units should be produced? 5- What will be the total profits? 6- If the price falls to $1, how many...

In a perfectly competitive market, if a firm raises the price of its product from the...

In a perfectly competitive market, if a firm raises the price of its product from the prevailing market price of $179 to $199, it will likely cause the firm to reach its shutdown point immediately. will cause the firm to recover some of its opportunity costs. would likely result in a substantial loss of sales to competitors. is a sure sign the firm is raising the given price in the market.

Suppose that a perfectly competitive firm faces a market price of $5 per unit, and at...

Suppose that a perfectly competitive firm faces a market price of $5 per unit, and at this price, the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1,500 units. If the firm produces 1,500 units, its average variable costs equal $5.50 per unit, and its average fixed costs equal $0.50 per unit. What is the firm's profit-maximizing (or loss-minimizing) output level? nothing. (Enter your response as a whole number long dash—...

Consider a firm which sells its product in a perfectly competitive market where the market price...

Consider a firm which sells its product in a perfectly competitive market where the market price is $4.20 per unit. The firms in the market have identical cost structures and is described by the following equations: TC = 40 + 0.1q2(squared) - 0.2q ATC = 40/q + 0.1q- 0.2 MC = 0.2q - 0.2 AVC= 0.1q - 0.2 1.a) What quantity should the firm produce to maximize its profit? 1.b) What is the firm’s profit at its profit-maximizing level of...

A firm sells a product in a perfectly competitive market, at a price of $50. The...

A firm sells a product in a perfectly competitive market, at a price of $50. The firm has a fixed cost of $30. Fill in the following table and indicate the level of output that maximizes profit. How would the profit-maximizing choice of output change if the fixed cost increased from $40 to $60? More generally, explain how the level of fixed cost affects the choice of output Output Total Revenue Total Cost Profit Marginal Revenue Marginal Cost 0 1...

A firm sells its product in a perfectly competitive market where other firms charge a price...

A firm sells its product in a perfectly competitive market where other firms charge a price of $120 per unit. The firm’s total costs are C(Q) = 50 + 12Q + 2Q2. a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profit? d. What adjustment should be anticipated in the long run? Exit will occur since these economic profits are...

Assume that the flour market is perfectly competitive and the price of flour is determined by...

Assume that the flour market is perfectly competitive and the price of flour is determined by the market at $9 per kg. Tony owns a mill and sells 10 kg of flour per day. At this output 10 kg, Tony has an average variable cost of $6, an average fixed cost of $2 and a marginal cost of $8 per day. Calculate Tony’s profit or loss at the output 10 kg of flour per day. What should Tony do if...

A firm is operating in the perfectly competitive market for gummy bears. It faces the following...

A firm is operating in the perfectly competitive market for gummy bears. It faces the following conditions: TC(q)=4+ (q2/16 ) MC(q)=q/8 Market Demand: D(P)=1008-200P Please answer the following questions. Suppose market price is currently at $2. a) What is the profit maximizing quantity for the firm to produce at? b) What is the profit for the firm at the profit maximizing quantity? c) If all firms are identical to this firm, how many firms must there be in the market?...

The following information describes the costs for a firm in a perfectly competitive market. Fill in...

The following information describes the costs for a firm in a perfectly competitive market. Fill in the cells (4 points) then answer the questions that follow. Quantity Variable Cost Fixed Cost Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 0 $300 -- 1 $110 2 $190 3 $250 4 $360 5 $510 6 $685 If the market price for this good is $150, what is the profit maximizing level of output for the firm? Show your work...

Question