94 (Key Assume the following cost data are for a purely competitive producer: Question) Average Average Average Total fixed variable total Marginal Product cost cost cost cost 0 $45 1 $60.00 $45.00 $105.00 40 2 30.00 42.50 72.50 35 3 20.00 40.00 60.00 30 4 15.00 37.50 52.50 35 5 12.00 37.00 49.00 40 6 10.00 37.50 47.50 45 7 8.57 38.57 47.14 55 8 7.50 40.63 48.13 65 9 6.67 43.33 50.00 75 10 6.00 46.50 52.50 a. At a product of $56, will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profitmaximizing or lossminimizing output? Explain. What economic profit or loss will the firm realize per unit of output? b. Answer the relevant questions of 4a assuming product price is $41. c. Answer the relevant questions of 4a assuming product is $32. d. In the table below, complete the shortrun supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3). (1) (2) (3) (4) Quantity Quantity supplied, Profit (+) supplied, Price single firm or loss (l) 1500 firms
94 (Key Question) Assume the following cost data are for a purely competitive producer: Total Product Average fixed cost Average variable cost Average total cost Marginal cost 0 1 2 3 4 5 6 7 8 9 10 $60.00 30.00 20.00 15.00 12.00 10.00 8.57 7.50 6.67 6.00 $45.00 42.50 40.00 37.50 37.00 37.50 38.57 40.63 43.33 46.50 $105.00 72.50 60.00 52.50 49.00 47.50 47.14 48.13 50.00 52.50 $45 40 35 30 35 40 45 55 65 75 a. At a product of $56, will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profitmaximizing or lossminimizing output? Explain. What economic profit or loss will the firm realize per unit of output? b. Answer the relevant questions of 4a assuming product price is $41. c. Answer the relevant questions of 4a assuming product is $32. d. In the table below, complete the shortrun supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3). (1) Price (2) Quantity supplied, single firm (3) Profit (+) or loss (l) (4) Quantity supplied, 1500 firms
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