Question:

Short-Run Cost of Production Schedule – Product X

(Perfect Competition)

1. Assume price = $250;  calculate total profit/loss using TR – TC method.

   OUTPUT	TR	TC	PROFIT/LOSS
   0
   1
   2
   3
   4
   5
   6
   7

2. Calculate Output using MR = MC rule and determine Profit/Loss/Output using
   Profit = (Price – ATC) x Q
3. Calculate Output using MR = MC rule when Price = $180.  Determine
   Profit/Loss/Output using same formula as in (B).
4. Calculate Output using MR = MC rule when Price = $140.  Determine
   Profit/Loss/Output.
5. Use price schedule to determine Q‘s.

   P	Q’s
   180
   250
   350
   450
   550
   650

6. What does short-run cost model tell you about the behavior of the firm in regard

to MC and Price?

Price: $2.99

Solution: The downloadable solution consists of 5 pages
Deliverable: Word Document