Output |
Fixed Cost |
Variable Cost |
Total Cost |
Average Fixed Cost |
Average Variable Cost |
Average Total Cost |
Marginal Cost |
0.00 |
10.00 |
- |
10.00 |
- |
- |
- |
- |
1.00 |
10.00 |
10.00 |
20.00 |
10.00 |
10.00 |
20.00 |
10.00 |
2.00 |
10.00 |
18.00 |
28.00 |
5.00 |
9.00 |
14.00 |
18.00 |
3.00 |
10.00 |
23.00 |
33.00 |
3.33 |
7.66 |
11.00 |
5.00 |
4.00 |
10.00 |
33.00 |
43.00 |
2.50 |
8.25 |
10.75 |
10.00 |
5.00 |
10.00 |
48.00 |
58.00 |
2.00 |
9.40 |
11.60 |
15.00 |
6.00 |
10.00 |
68.00 |
78.00 |
1.66 |
11.33 |
13.00 |
20.00 |
7.00 |
10.00 |
98.00 |
108.00 |
1.42 |
14.00 |
15.42 |
30.00 |
8.00 |
10.00 |
148.00 |
158.00 |
1.25 |
18.50 |
19.75 |
50.00 |
In perfect competition, P >= MC.
(I) When P = 200, Q = 8 since this is the maximum output for which price is higher than MC.
Profit = Q x (P - ATC) = 8 x (200 - 19.75) = 8 x 180.25 = 1442
So firm will earn positive profit.
In perfect competition, each firm is a price taker and cannot set their own price. So firm cannot increase price.
(II) When P = 300, Q = 8 since this is the maximum output for which price is higher than MC.
Profit = Q x (P - ATC) = 8 x (300 - 19.75) = 8 x 280.25 = 2242
So firm will earn positive profit.
(III) When P = 100, Q = 8 since this is the maximum output for which price is higher than MC.
Profit = Q x (P - ATC) = 8 x (100 - 19.75) = 8 x 80.25 = 642
So firm will earn positive profit.
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