Complete the following table for a perfectly competitive firm Instructions: Ente

Question

Complete the following table for a perfectly competitive firm Instructions: Enter your responses rounded to two decimal places Output Total Cost Marginal Cost Average Total Cost Average Variable Cost $100 110 130 170 10 15 20 25 30 35 290 380 490 Instructions: Enter your response as a whole number. Indicate a negative response with a -) negative sign. (a) If the price is $10, how much output will the firm supply? units (b) How much profit or loss will it make? (c) At what price will the firm shut down? Click to select) v

Explanation / Answer

Total Cost=Fixed Cost+Variable Cost

Variable Cost=bQ and Fixed Cost=a

Total Cost=a+bQ

FIxed Cost=a=100

For Competitive firm

Price=MC=10 then output is 20

Profit made when Price is $10 equals to P*Q-C=10*20-220=-20

Below $20 Price Firm will shut down

Output Total Cost Marginal Cost Average Cost Average Variable Cost 0 100 0 5 110 2 22 2 10 130 4 13 3 15 170 8 11.33333333 4.666666667 20 220 10 11 6 25 290 14 11.6 7.6 30 380 18 12.66666667 9.333333333 35 490 22 14 11.14285714

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