In: Economics
Quantity | Total fixed cost, TFC (dollars) | Total variable cost, TVC (dollars) |
0 | 500 | 0 |
1 | 500 | 100 |
2 | 500 | 180 |
3 | 500 | 220 |
4 | 500 | 300 |
5 | 500 | 390 |
6 | 500 | 500 |
7 | 500 | 640 |
8 | 500 | 800 |
9 | 500 | 1000 |
10 | 500 | 1250 |
11. The table above shows some of the costs for a perfectly competitive firm. If the price is $160 per unit, how many units of output will the firm produce?
A) 8
B) 9
C) 10
D) more than 10
Option A
8 units
Quantity | Total fixed cost, TFC | Total variable cost, TVC | MC |
(dollars) | (dollars) | ||
0 | 500 | 0 | |
1 | 500 | 100 | 100 |
2 | 500 | 180 | 80 |
3 | 500 | 220 | 40 |
4 | 500 | 300 | 80 |
5 | 500 | 390 | 90 |
6 | 500 | 500 | 110 |
7 | 500 | 640 | 140 |
8 | 500 | 800 | 160 |
9 | 500 | 1000 | 200 |
10 | 500 | 1250 | 250 |
MC of n the unit=(TC of n units -TC of p units )/(n-p)...............n>p
The firm produces at MC=P and that is equal to 8 units