Question

A purely competitive firm finds that the market price for its product is $30.00. It has a fixed cost of $100.00 and a variable cost of $17.50 per unit for the first 50 units and then $35.00 per unit for all successive units.

Does price exceed average variable cost for the first 50 units? (Click to select)YesNo

What is the average variable cost for the first 50 units?

Instructions: Round your answer above to two decimal places.

Does price exceed average variable cost for the first 100 units? (Click to select)NoYes

What is the average variable cost for the first 100 units?

Instructions: Round your answers to two decimal places.

What is the marginal cost per unit for the first 50 units? $ per unit for the first 50 units.

What is the marginal cost for units 51 and higher? $ per unit for subsequent units.

For each of the first 50 units, does MR exceed MC? (Click to select)NoYes

For the units 51 and higher does MR exceed MC? (Click to select)YesNo

What output level will yield the largest possible profit for this purely competitive firm?

Producing units will maximize profit