Utilizing the following chicken wing production function that you had completed
ID: 1222696 • Letter: U
Question
Utilizing the following chicken wing production function that you had completed in homework 2 that includes output and cost information for a firm, respond to the questions given, assuming the firm is a perfectly competitive firm: Assume that the selling price for chicken wings is $2.50. What would be the profit maximizing rate of output? Would the firm be generating profit above all costs at that selling price? If the price of chicken wings drops to $2.00, how many chicken wings should be produced then? Are you making profit above all costs at $2 chicken wings? At what price would be the short-run breakeven point? At what price should the firm shut down? Why do firms in a monopolistically competitive industry advertise? Research a firm you feel would be in monopolistic competition and explain their advertising scheme in a short summary. Be sure and cite your reference. How is collusion used in oligopoly markets? What is a cartel? Are they legal? Give one example of either collusion or a cartel that has occurred in the past.Explanation / Answer
a. if the price of one unit is $2.50, the profit maximizing sales= 331 untis
b. if the price is $2, it is better to produce 242 units, no combination of production gives profits at this price
c. firm break even point=
8. because here the firms are producing homogenious and alternative goods, people go with the firm which offer qulaity product at lesser cost. there are many firms following the same.
9. collusion and cartel both are illegal. here the producers come together and control market price or supply to a product to the market.
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