Answer all the questions below by looking at the average cost, marginal cost and

Question

Answer all the questions below by looking at the average cost, marginal cost and demand curves for firm X shown here:

17) Is this firm in a perfectly competitive industry ? How do you know ?

18) On the diagram above, AVERAGE FIXED COST is the HIGHEST at .what Quantity ?

19) On the diagram above, AVERAGE VARIABLE COST is HIGHEST at. what Quantity ?

20) If the market Price =$80, what is the profit maximizing output level for this firm ?

21)At the output level you answered for question (20), what will be the TOTAL PROFITS for this firm?

22) What is the socially optimal price for this firm ?

23) What quantity will this firm produce in the LONG RUN?  

24) This firm would make POSITIVE profits if the market price was above what ?(how many dollars ?)

25) What quantity is the MAXIMUM TECHNICAL EFFICIENCY output for this firm ?

Explanation / Answer

17) P= MC, MC>AC

18) AVERAGE FIXED COST is the HIGHEST at .what Quantity at 200

MC cuts AC

19 AVERAGE VARIABLE COST is HIGHEST at. what Quantity at 500

20(

If the market Price =$80, what is the profit maximizing output level for this firm at 300

21 total profits will $80 * 300= 24000

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