Assume the short-run average total cost for a perfectlycompetitive industry rema
ID: 1240599 • Letter: A
Question
Assume the short-run average total cost for a perfectlycompetitive industry remains constant as the output of the industryexpands. In the long run, the industry supply curve will:
A)be perfectly vertical.
B)have a negative slope.
C)be perfectly horizontal.
D)have a positive slope
Exhibit 10-1 A monopolistic competitivefirm
As represented in Exhibit 10-1, the maximum long-run economicprofit earned by this monopolistic competitive firm is:
A)$200 per day.
B)$1,000 per day.
C)zero.
D)$20,000 per day.
Exhibit 7-8 Costs schedules for producingpizza
Pizzas
Fixed
Cost
Variable
Cost
Total
Cost
Marginal
Cost
0
$
$
$
$
1
5
2
13
3
10
4
100
140
5
20
6
85
7
215
By filling in the blanks in Exhibit 7-8, the total cost ofproducing 5 pizzas is shown to be equal to:
A)$160.
B)$105.
C)$113.
D)$100.
E)$123.
Use the table below to answer the following question.
Units of
Total Fixed
Total Variable
Output
Cost (dollars)
Cost (dollars)
1
1,000
1,200
2
1,000
2,400
3
1,000
3,600
4
1,000
5,000
5
1,000
6,600
What is the average total cost at an output level of fourunits?
A)$1,400.
B)$1,200.
C)$1,500.
D)$2,000.
Pizzas
Fixed
Cost
Variable
Cost
Total
Cost
Marginal
Cost
0
$
$
$
$
1
5
2
13
3
10
4
100
140
5
20
6
85
7
215
Explanation / Answer
You are missing the graph for the second question. Reply tothis post or PM me the graph and ill explain it to you.
Since the marginal cost from 4 pizzas to 5 pizzas is $20. Youknow that price increases by $20 when 1 more pizza is made. So add20 to 140 and you get 160 which is A
Total cost = Total fixed cost + Total variable cost Total cost = 1,000 + 5,000 = 6,000 Total cost/4 = Average total cost Average total cost = 6,000/4 ATC = 1500 So your answer is C