ECON2113 Chapter 7 Assignment-Perfect Competition Dollars per unit MC 56 52 48 4
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Question
ECON2113 Chapter 7 Assignment-Perfect Competition Dollars per unit MC 56 52 48 40 36 ATC 20 16 12 100 150 200 250 1. Using the figure above, what is the optimal quantity of goods for the firm to produce? (2 points) 2. Using the figure above, what is the optimal price for the quantity of goods for the firm to produce? (2 points) 3. Using the figure above, what is the total revenue for the firm? (2 points) 4. Using the figure above, what is the total cost for the firm? (2 points) 5. Using the figure above, what is profit/loss for the firm? (2 points) 1 of 2 , words: 900180 )Explanation / Answer
1. 200 units
Equilibrium quantity is where MR = MC i.e. 200 units.
2. Under perfect competition, P = MR = $ 40
3. TR = Price x Quantity = 40 x 200 = 8000
4. TC = 200 units x 24 = 4800
5. Profit = TR - TC = 8000 - 4800 = 3200
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