17) Is this firm in a perfectly competitive industry ? How do you know ? 18) On
ID: 2495814 • Letter: 1
Question
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) Yes. Becaude the demand curve is a horizontal straight line.
18) AFC curve is not given. So, answer can not be determined.
19) AFC curve is not given. So, answer can not be determined.
20) 300.( At quantity 300, MR = MC)
21) Profit = $40*300 = $12,000
22) The socially optimal price is $80 where MC = MR = AR
23) Can not be determined in this graph.
24) This firm would make POSITIVE profits if the market price was above $20.
25) 200. (Explanation: A firm is said to be technically efficient if a firm is producing the maximum output from the minimum quantity of inputs, such as labour, capital and technology.It is concerned with producing at the lowest point on the short run average cost curve.)
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