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Use the following cost data to answer all six questions: three for a purely competitive producerand...

Use the following cost data to answer all six questions: three for a purely competitive producerand three for a monopolist. (BE SURE TO SHOW YOUR WORK)

Total Product Total Fixed Cost Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost
0 $70 $_ $70 $_ $_ $_ $_
1
$70
$20 $90 $70 $20 $90 $20
2 $70 $36 $106 $35 $18 $53 $16
3 $70 $60 $130 $23.33 $20 $43.33 $24
4 $70 $90 $160 $17.50 $22.50 $40 $30
5 $70 $130 $200 $14 $26 $40 $40
6 $70 $180 $250 $11.67 $30 $41.67 $50
7 $70 $250 $320 $10 $35.71 $45.71 $70
8 $70 $340 $410 $8.75 $42.50 $51.25 $90

Answer parts a, b, and c assuming the firm is a perfect competitor

a. At a product price of $35, will the firm produce in the short run? Yes or no.

b. If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Explain.

c. What economic profit or loss will the firm realize?

Answer parts d, e, and f assuming the firm is a monopolistfacing a demand curve of P = 65-Q:

d. Will this monopolist produce in the short run? Why or why not?

e. If it is preferable to produce, what will be the monopolist’s profit-maximizing or loss-minimizing output? Explain.

f. What economic profit or loss will the monopolist realize?

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Answer #1

does nit ocows 6) 21- it is advised to produce, then TT Maxolp% When Q- 14 0 -1602o0-5 ML 65-10-55 е 아fond η takes place, then, MR>Mc , 80, afa-6 at 0-6, f: 65-6-59 = (59人6-950

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