
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
please explain and solve it step by step, thank you!

Transcribed Image Text:**Cost Data for a Purely Competitive Producer**
The following table presents the cost data for a purely competitive producer:
| **Total Product** | **Average Fixed Cost** | **Average Variable Cost** | **Average Total Cost** | **Marginal Cost** |
|-------------------|------------------------|---------------------------|------------------------|-------------------|
| 0 | | | | $ 45 |
| 1 | $60.00 | $45.00 | $105.00 | $ 45 |
| 2 | $30.00 | $42.50 | $72.50 | $ 40 |
| 3 | $20.00 | $40.00 | $60.00 | $ 35 |
| 4 | $15.00 | $37.50 | $52.50 | $ 30 |
| 5 | $12.00 | $37.00 | $49.00 | $ 35 |
| 6 | $10.00 | $37.50 | $47.50 | $ 40 |
| 7 | $ 8.57 | $38.57 | $47.14 | $ 45 |
| 8 | $ 7.50 | $40.63 | $48.13 | $ 55 |
| 9 | $ 6.67 | $43.33 | $50.00 | $ 65 |
| 10 | $ 6.00 | $46.50 | $52.50 | $ 75 |
### Explanation:
- **Total Product**: The quantity of output produced.
- **Average Fixed Cost (AFC)**: The fixed cost per unit of output. As production increases, AFC declines.
- **Average Variable Cost (AVC)**: The variable cost per unit of output.
- **Average Total Cost (ATC)**: The sum of AFC and AVC per unit of output.
- **Marginal Cost (MC)**: The additional cost of producing one more unit of output.
As production increases, AFC decreases due to the spreading of fixed costs over more units. AVC initially decreases, reaches a minimum, and then starts increasing due to
![### Problem Scenario
#### c. At a product price of $32:
**(i) Will this firm produce in the short run?**
- [Selection Box: Click to select]
**(ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output?**
- [Selection Box: Click to select] output = [Input Box] units per firm
**(iii) What economic profit or loss will the firm realize per unit of output?**
- [Selection Box: Click to select] per unit = $[Input Box]
#### d. Short-Run Supply Schedule:
Complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3).
### Instructions:
Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (–) in front of those numbers.](https://content.bartleby.com/qna-images/question/c3acae65-05d5-4940-8762-2c9a874e450a/b997ed4b-9367-4d5a-b491-eb55a24cc365/6nig8mm_thumbnail.png)
Transcribed Image Text:### Problem Scenario
#### c. At a product price of $32:
**(i) Will this firm produce in the short run?**
- [Selection Box: Click to select]
**(ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output?**
- [Selection Box: Click to select] output = [Input Box] units per firm
**(iii) What economic profit or loss will the firm realize per unit of output?**
- [Selection Box: Click to select] per unit = $[Input Box]
#### d. Short-Run Supply Schedule:
Complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3).
### Instructions:
Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (–) in front of those numbers.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 3 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education


Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education