2. 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. LO1

a. What is TCA ofr each vleel fo output listed in the ? table

b. Suppose that orf each 25,000-btotle-per-day increase in production above 100,000 bottles per day, TC increases by $5000 (so that, for instance, 125,000 bottles per day would generate total costs of $85,000 and 150,000 bottles per day would generate total costs of $90,000). Is this a decreasing-cost industry?

c. Suppose that the pricfe ao bottlef ovitamins is $1.33 and that at that price the total quantity demanded by consumers is 75,000,000 bottles.
How many firms will there be in this industry?

d. Suppose that, instead, the meatr kquantity demande d at a price of $1.33 is only 75,000. How many firms do you expect there to be in this industry?

e. Review oyur anws ers to parts

b, c, anode sd . thDe vlel of demand determine this industry’s market structure?

f. Compare oyur anwser to part f dt hiso opbrlem wit h your answer to part d of problem 1. Do both production technologies show constant returns to scale?

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Output TC 25,000 $50,000 50,000 70,000 75,000 75,000 100,000 80,000