(Solved): Solve: I. Assume this is a perfectly competitive market. Answer the following questions and explain ...
Solve: I. Assume this is a perfectly competitive market. Answer the following questions and explain your answers. Complete the table. \table[[Q,TC,FC,VC,AFC,AVC,ATC,MC],[0,
$6.50,,,,,,],[1,
$9.50,,,,,,],[2,
$10.50,,,,,,],[3,
$11.50,,,,,,],[4,
$12.50,,,,,,],[5,
$13.50,,,,,,],[6,
$14.50,,,,,,],[7,
$18.00,,,,,,],[8,
$22.00,,,,,,],[9,
$26.50,,,,,,],[10,
$31.50,,,,,,]] Assume that the market price is
$3.50: What is the profit-maximizing level of output for this firm? What is the dollar amount of the profit, or loss? 4. What would happen with the number of firms in this market if the price drops to
$3.00? Why?
q,5. What would be the economic profit, or loss, for this firm if the fixed cost increases by
$1.50and the market price remains at
$3.50? 6. What is the long-run equilibrium price for this company? 7. What is the shut-down price for this company?
