Assume that the cost data in the following table are for a purely competitive producer: Average Fixed cost Average Variable Cost Average Total Cost Marginal Cost Total Product 0 1 2 3 $ 60.00 30.00 20.00 15.00 12.00 10.00 4 5 6 7 $ 45.00 42.50 40.00 37.50 37.00 37.50 38.57 40.63 43.33 46.50 $ 105.00 72.50 60.00 52.50 49.00 47.50 47.14 48.13 50.00 52.50 $45.00 40.00 35.00 30.00 35.00 40.00 45.00 55:00 65.00 75.00 8.57 8 9 10 7.50 6.67 6.00 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 a. At a product price of $56.00 (0) Will this firm produce in the short run? Click to select 2 o if it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select output units per firm (10) What economic profit or loss will the firm realize per unit of output? Click to select) per unit = $ b. At a product price of $41.00 (0) Will this firm produce in the short run? (Click to select) (1) if it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select output units per firm (III) What economic profit or loss will the firm realize per unit of output? (Click to select) per unit - $ c At a product price of $32.00 Will this firm produce in the short run? Click to selet) (1if it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? (Click to select) output units per firm (H) What economic profit or loss will the firm realize per unit of output? icick to select) per unit = Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. 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) (1) Price (2) Quantity Supplied, Single Firm (3) Profit (+) or Loss (-) (4) Quantity Supplied, 1,500 Firms $26.00 32.00 38.00 41.00 46.00 56.00 66.00 e. Now assume that there are 1,500 identical firms in this competitive industry. That is, there are 1,500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4 in the table above). 1. Suppose the market demand data for the product are as follows: Price $26.00 32.00 38.00 41.00 46.00 56.00 66.00 Total Quality Demanded 17,000 15,000 13,500 12,000 10,500 9.500 8,000 What is the equilibrium price? $ What is the equilibrium output for the industry? units For each firm? Duits Instructions: Enter your answers rounded to two decimal places. Enter positive values for profit or loss. What will profit or loss be per unit? Click to select) per unit - $ Per firm? $ Will this industry expand or contract in the long run? (Click to select)
