Using the table below, Suppose a firm is operating in a perfectly competitive ma
ID: 1166531 • Letter: U
Question
Using the table below, Suppose a firm is operating in a perfectly competitive market that is in equilibrium and answer for the following questions:
Output
Fixed Cost
Tot. Variable Cost
TC
Avg. Fixed Cost
Avg. Variable Cost
Avg. Total Cost
Marginal Cost
0
100
0
100
1
100
1
101
100
1
101
2
2
100
4
104
50
2
52
4
3
100
9
109
33.33333
3
36.33333
6
4
100
16
116
25
4
29
8
5
100
25
125
20
5
25
10
6
100
36
136
16.66667
6
22.66667
12
7
100
49
149
14.28571
7
21.28571
14
8
100
64
164
12.5
8
20.5
16
9
100
81
181
11.11111
9
20.11111
18
10
100
100
200
10
10
20
20
11
100
121
221
9.090909
11
20.09091
22
12
100
144
244
8.333333
12
20.33333
24
13
100
169
269
7.692308
13
20.69231
26
14
100
196
296
7.142857
14
21.14286
28
15
100
225
325
6.666667
15
21.66667
30
16
100
256
356
6.25
16
22.25
32
17
100
289
389
5.882353
17
22.88235
34
18
100
324
424
5.555556
18
23.55556
36
19
100
361
461
5.263158
19
24.26316
38
20
100
400
500
5
20
25
40
a.) Given that the market is in equilibrium, what do we expect the market price to be?
b.) Using your answer from above (part a) , find the average total cost, average fixed cost, and the average variable cost.
c.) Suppose now consumers get richer (assume the good is a normal good), what do we expect to happen to the market price? Will this lead to an increase or decrease in the amount each firm in the market produces?
d.) Assuming the price increases to 30, how much should a profit maximizing firm produce?
e.) Given that firms are now earning an economic profit what do we expect to happen to the number of firms in the industry over the long run? How will this shift the market supply curve?
f.) Eventually, firms will no longer enter the market. At what price will firms no longer enter the industry?
Output
Fixed Cost
Tot. Variable Cost
TC
Avg. Fixed Cost
Avg. Variable Cost
Avg. Total Cost
Marginal Cost
0
100
0
100
1
100
1
101
100
1
101
2
2
100
4
104
50
2
52
4
3
100
9
109
33.33333
3
36.33333
6
4
100
16
116
25
4
29
8
5
100
25
125
20
5
25
10
6
100
36
136
16.66667
6
22.66667
12
7
100
49
149
14.28571
7
21.28571
14
8
100
64
164
12.5
8
20.5
16
9
100
81
181
11.11111
9
20.11111
18
10
100
100
200
10
10
20
20
11
100
121
221
9.090909
11
20.09091
22
12
100
144
244
8.333333
12
20.33333
24
13
100
169
269
7.692308
13
20.69231
26
14
100
196
296
7.142857
14
21.14286
28
15
100
225
325
6.666667
15
21.66667
30
16
100
256
356
6.25
16
22.25
32
17
100
289
389
5.882353
17
22.88235
34
18
100
324
424
5.555556
18
23.55556
36
19
100
361
461
5.263158
19
24.26316
38
20
100
400
500
5
20
25
40