Question
Do the firms in an oligopoly act independently or interdependently? Explain your answer. A perfectly competitive firm has the following fixed and variable costs in
Do the firms in an oligopoly act independently or interdependently? Explain your answer.
A perfectly competitive firm has the following fixed and variable costs in the short-run. The market price for the firm's product is $140.
OUTPUT FC VC TC TR PROFIT/LOSS
0 $80 $0 _ _ _
1 80 90 _ _ _
2 80 170 _ _ _
3 80 290 _ _ _
4 80 430 _ _ _
5 80 590 _ _ _
6 80 770 _ _ _
Complete the table.
What level of output should the firm produce to maximize profits?
Assume this firm is making a loss when it produces its 7thunit of output. What should the firm do in the short-run? Should it operate at loss or shutdown in the short-run?
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