Economics (7th Edition) (What's New in Economics)
Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 12, Problem 12.4.6PA

Subpart (a):

To determine

The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.

Subpart (b):

To determine

The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.

Subpart (c):

To determine

The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.

Subpart (d):

To determine

The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.

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a. Graph a purely competitive market showing the point of equilibrium at a price of $150 and a total product of 400,000. b. Next to this graph, graph the purely competitive firm. What price will the firm charge for the product? Will they charge $150, less than $150, or more than $150? c. Show the demand, average revenue, and marginal revenue curve on the graph for the firm. d. Show the profit maximizing quantity for the firm at 250 units of output, or tp. e. Show this firm making a profit of $5,000, making sure to solve for the numerical value for the ATC at the quantity, or tp, of 250, and showing the profit area on the graph.
What are the outcomes if cigarettes enter the perfect competition market?
Show in graph a consumers’ surplus when the market is perfectly competitive and when its monoplized.
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