Question

Same question/divided into two parts
Assume that the following cost data are for a purely competitive producer: as Total Product Average Fixed Total Product Cost 0 na 1 $ 60.00 2 $ 30.00 $ 20.00 $ 15.00 12.00 $ 10.00 $ 8.57 $ 7.50 $ 6.67 10 6 .00 Average Average Total eost Average Total Marginal Cost Variable Cost Cost 0 .00 5 0 .00 na $ 45.00 $ 105.00 $ 45.00 $ 42.50 $ 72.50 $ 40.00 $ 40.00 $ 60.00 $ 35.00 37.50 $ 52.50 $ $ 37.00 $ 49.00 $ 35.00 $ 37.50 $ 47.50 $ 40.00 $ 38.57 $ 47.14 5 45.00 40.63 $ 48.13 $ 55.00 $ 43.33 $ 50.00 $ 65.00 48.50 $ 52.50 $ 75.00 30.00 Answer the questions in the first column In the table below for the price listed at the top of each of the other three columns. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) In front of those numbers. Select "Not applicable" and enter a value of "O" for output if the firm does not produce. At a product price of $57.00 (b) At a product price of $42.00 (c) At a product price of $33.00 Will this firm produce in the short run? (Click to select) (Click to select) (Click to select) if it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select output = units per firm (Click to select output = units per firm Click to select output O units per firm What economic profit or loss will the firm realize per unit of output? Click to select (Click to select per unit = $ (Click to select per unit = $ = S d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and Indicate the profit or loss incurred at each output (column 3).

Answer 1

a) P=57

Yes, the firm will produce

Profit maximizing output = 8

Profit per unit = 57-48.13 = 8.87

b) P=42

Yes, the firm will produce

Loss minimizing output = 6

Loss per unit = 42-47.5 = -5.5

c) P=33

No, the firm will not produce so It's N/A

Output = 0 units

Loss = -60

d and e)

P	QS-SINGLE FIRM	P/L	QS-1500 FIRMS
27	0	-60	0
33	0	-60	0
39	5	-50	7500
42	6	-33	9000
47	7	-0.98	10500
57	8	70.96	12000
67	9	153	13500

f) Equilibrium price = 47

Equilibrium output = 10500

For each firm = 7

Loss per unit = -0.14

Per firm = -0.98

This industry will contract