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28 Sep 2019
Given the following short-run production cost schedule:
Quantity Produced
Total Cost ($)
0
20
1
27
2
38
3
53
4
73
5
100
6
130
The table above gives the short-run total cost function for a typical firm in a perfectly competitive industry.
(a) What is the dollar value of the firm's total fixed cost?
(b) Calculate the marginal cost of producing the first unit of output.
(c) If the price the firm receives for its product is $20, indicate the firm's profit-maximizing quantity of output.
(d) Explain your answer in (c) above.
(e) Given your results, what will happen to the number of firms in the industry in the long-run (assuming there is no barrier to entry). Explain.
(f) Input the above data in excel and draw, using excel, the (1) total cost, (2) fixed cost, and (3) average variable cost curves for the above firm.
Given the following short-run production cost schedule:
| Quantity Produced | Total Cost ($) |
| 0 | 20 |
| 1 | 27 |
| 2 | 38 |
| 3 | 53 |
| 4 | 73 |
| 5 | 100 |
| 6 | 130 |
The table above gives the short-run total cost function for a typical firm in a perfectly competitive industry.
(a) What is the dollar value of the firm's total fixed cost?
(b) Calculate the marginal cost of producing the first unit of output.
(c) If the price the firm receives for its product is $20, indicate the firm's profit-maximizing quantity of output.
(d) Explain your answer in (c) above.
(e) Given your results, what will happen to the number of firms in the industry in the long-run (assuming there is no barrier to entry). Explain.
(f) Input the above data in excel and draw, using excel, the (1) total cost, (2) fixed cost, and (3) average variable cost curves for the above firm.
Joshua StredderLv10
28 Sep 2019
