Question

In: Economics

The Following table shows total cost (TC) of a kid selling lemonade, where the lemonade market...

The Following table shows total cost (TC) of a kid selling lemonade, where the lemonade market is considered “Competitive” market. Answer all following questions:

Quantity of Output

Total Cost $

0

5

1

8.5

2

15

3

22

4

30.5

5

45.5
  1. What are the conditions of Perfect Competition?
  2. What does “Price Taker” mean?
  3. If the market price is $8.50, what is the profit-maximizing output? Explain.
  4. If the market price is $8.50, calculate the economic profit (loss)?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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