2. Table below refers to a PC firm.Firm1PriceQuantityproduced perunit$120$120$120$120$120$120$120$120$120$1200123456789Total Marginal Total Marginal profit Marginal ATCRevenue revenue costprofitcost0120100150202257317385465562682812a) Complete the table.b) What is the profit-maximizing output?c) What is the relationship between price, marginal revenue and marginal cost at theprofit maximizing level of output?d) If the P were RM80, should the firm continue to operate? Why or why not?e) Draw the firm's short run SS curve

Perfect competition is a market form with a high number of buyers and a high number of sellers.…

2. Table below refers to a PC firm. Firm 1 Quantity Price Total produced per Revenue unit $120 $120 $120 0 1 2 3 4 5 6 7 8 9 $120 $120 $120 $120 $120 $120 $120 0 120 a) Complete the table. b) What is the profit-maximizing output? Marginal Total Marginal profit Marginal ATC revenue profit cost cost 100 150 202 257 317 385 465 562 682 812 c) What is the relationship between price, marginal revenue and marginal cost at the profit maximizing level of output? d) If the P were RM80, should the firm continue to operate? Why or why not? e) Draw the firm's short run SS curve

2. Table below refers to a PC firm. Firm 1 Quantity Price Total produced per Revenue unit $120 $120 $120 0 1 2 3 4 5 6 7 8 9 $120 $120 $120 $120 $120 $120 $120 0 120 a) Complete the table. b) What is the profit-maximizing output? Marginal Total Marginal profit Marginal ATC revenue profit cost cost 100 150 202 257 317 385 465 562 682 812 c) What is the relationship between price, marginal revenue and marginal cost at the profit maximizing level of output? d) If the P were RM80, should the firm continue to operate? Why or why not? e) Draw the firm's short run SS curve

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 39P: The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total...

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A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
What two lines on a cost curve diagram intersect at the zero-profit point?
What two lines on a cost curve diagram intersect at the shutdown point?
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