OUTPUT (PER DAY) COSTS (S) TOTAL AFC AVC ATC MC 0 12.00 22.00 28.00 30.00 36.00
ID: 1117831 • Letter: O
Question
OUTPUT (PER DAY) COSTS (S) TOTAL AFC AVC ATC MC 0 12.00 22.00 28.00 30.00 36.00 50.00 2.00 112.00 176.00 288.00 4.00 6.00 10.00 2.00 1. Complete the table above (8 points) is a price taker and the market price for the good produced is S 14 .00, what If this firm level of production will maximize profits for this firm? (1 points) 2. 3. At a market price of S14.00, how much profit(loss) would the firm earn? (2 points) 4. At a market price of S6.20, How much profit(loss) would the firm earn? (2 points) a. Would the firm stay open in the short run, or close down? (1 points) 5. What is the minimum market price at which the firm will remain open in the short run? (1 points) 6. Assuming that all the firms in the market have the same costs as those above and that those costs include all opportunity costs (implicit and explicit), what would the long run equilibrium market price be? 2 points)Explanation / Answer
b) when P=14 then Q=5 will maximise profit
c)Profit=TR-TC=14*5-36=34
d)P=6.25 Q=4 and firm is incurring loss and still firm will be in business
e)P=min of AVC=6
f)P=min of ATC=9 in long run
output TC AFC AVC ATC MC 0 12 1 22 12 10 22 10 2 28 6 8 14 6 3 30 4 6 10 2 4 36 3 6 9 6 5 50 2.4 7.6 10 14 6 72 2 10 12 22 7 112 1.714286 14.28571 16 40 8 176 1.5 20.5 22 64 9 288 1.333333 30.66667 32 112Related Questions
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