Question

A new production technology for making vitamins is invented by a college professor who decides not to patent it Thus, it is available for anybody to copy and put into use. The TC per bottle for production up to 100,000 bottles per day Is given in the following table a, What is ATC for cach lovel of output listed in the table? Instructions: Round your answers to two decimal places. Output 25.000 ATC S95.000 115.000 50.000 75.000 120 000 100,000 125 000 b. Suppose that for each 25,000-bottle-per-day increase in production above 100,000 bottles per day, TC increases by $5,000 (so that, for instance, 125,000 bottles per day would generate total costs of $130,000 and 150,000 $135.000) bottles per day would generate total costs s this a decreasing-cost industry? (Click select) c. Suppose that the price of a bottle of vitamins is $2.23 and that t that price the total aquantity demanded bv consumers is 75.000.000 bottles, How many firms will there be in this industry? fitm/s) d. Suppose that, instead, the market quantity demanded at a price of $2.23 is only 75,000. How many firms do you expect there to be in this industry? firm(s) . Review your answers to parts b, c, and cd. Does the level of demand determine this industry's market structure? (Click selcct)

Answer 1

A)

Output	TC	ATC
25000	95000	3.80
50000	115000	2.30
75000	120000	1.60
100000	125000	1.25

B)

Output	TC	ATC
25000	95000	3.80
50000	115000	2.30
75000	120000	1.60
100000	125000	1.25
125000	130000	1.04
150000	135000	0.90

Yes,this is a decreasing cost industry

C) There is 1 firm in the market as the market structure is that of a natural monopoly

D) there will be 1 firm in the market

E) No,the level of demand does not determine the industry's market structure