Statistics Solutions

(Solved) Suppose a competitive firm producing an undifferentiated product in a market with low barriers to entry faces the partially depicted short-run

Question: Suppose a competitive firm producing an undifferentiated product in a market with low barriers to entry faces the partially depicted short-run costs in the table below.

  1. Complete the table below. Round to two places after the decimal, if necessary.
    Q FC VC TC MC AFC AVC ATC
    10 154.00 7.40 8.00 7.40 15.40
    20 96.10 2.21 4.00 4.805 8.805
    30 120.10 200.10 2.67 4.003
    40 148.00 228.00 2.79 5.70
  2. After which value of output (in the table) does marginal product diminish?
  3. If equilibrium price in this market is $2.40, how much output maximizes this firm’s profit?
  4. What profit does the firm earn when it produces the output in part c.? Round to two places after the decimal, if necessary.
  5. Does the short-run quantity chosen in part c. exist on this firm’s supply curve? Why or why not?

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