Need help solving questions 8-12? Use the following to answer questions 8 - 12 A

Question

Need help solving questions 8-12? Use the following to answer questions 8 - 12 Answer Questions 8 -12 on the basis of the following cost data: The TVC of producing 5 units: The ATC of producing 3 units: The AFC of producing 3 units: The MC of producing the sixth unit of output: The profit maximization solution (PMS) for this firm is: In the short run a perfectly competitive firm will always make an abnormal profit if: P = ATC b. P>AVC c. P = MC d. P>ATC On the graph below are indicated the cost curves of a perfectly competitive firm and a series of MR Curves from some of the prices which the market might set for the firm. Answer Questions 14-19 by referring to the graph.

Explanation / Answer

ans 8 cannot be determined

as no information is given about fixed cost( atleast not in the pic) and TVC= TC- TFC

ans 9

ATC of 3 units = TC/ q = 41/3 = 13.67

ans 10

AFC cannot be determined as no information is given about fixed cost, AFc= TFC/q

ans 11

MCof 6 th unit= TC at q=6   - TC at q=5 = 61-54 = 7

ans 12...cannot be determined

profit is maximised where MR= MC   and we don't kmow about revenue here

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