The table shows the cost data for one of several identical firms in a constant cost...

The table shows the cost data for one of several identical firms in a constant cost perfectly competitive industry for product X. Fill in the table given the fixed cost is $50.

Quantity of X	TVC	TFC	TC	AFC	AVC	ATC	MC
0	0
1	70
2	120
3	155
4	193
5	242
6	302
7	370
8	462
9	571

1. In the short run, calculate the output and profit or loss for this typical firm for each of the following prices.

a). P=$55 b). P=$65 c). P=$75 d). P=$85 e). P=$95

2. Consider that there are 25 identical firms currently in this perfectly competitive market. The current market demand is:

Quantity Demanded	Price
220	45
205	55
190	65
175	75
160	85
145	95

a). On a properly labeled graph, illustrate the market demand and industry supply, and determine the short run price, quantity and profit for the typical firm.

b). In the long run, explain how the number of firms will change and waht will be the long run equilibrium price and output level (Q) in the market?

c). Suppose all 25 firms were taken over and the market was monopolized by one owner. Explain ( price quantity, profit) how your answer to (a) above would now change.

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Expert Solution

Rahul Sunny answered 1 year ago

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