Question

Let’s assume a wheat flour factory is perfectly competitive and the given price of wheat per...

  1. Let’s assume a wheat flour factory is perfectly competitive and the given price of wheat per kg is $20. State the condition and identify when the firm maximizes profit. Also, calculate profit at the profit maximizing level of output.

Output of Wheat (kg)

Total Cost ($/kg)

Total Revenue

Marginal Revenue

Average Revenue

Marginal Cost

0

20

1

32

2

42

3

47

4

60

5

80

6

120

  1. The market for widgets are perfectly competitive.

TC = 2q2 + 5q + 50

MC = 4q + 5

Demand for widgets is characterized by the equation: Pd = 1025 - 2Qd

  1. Show the formula and the equation for ATC for the firm.
  2. Calculate the long-run equilibrium price in the perfectly competitive market
  3. Calculate the long-run equilibrium output for a single firm in the perfectly competitive market

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