Question

The table shown below gives the short-run total cost function Noel’s window cleaning firm. This firm competes in a perfectly competitive market.



a. What is the firm’s total fixed cost in dollars? How do you know this?

b. What is the marginal cost for the 5th unit of output?

c. Noel’s firm charges the market price for window washing jobs, $30/job. At what output will the firm maximize profit? What will that profit be?

d. Given the results in part (c) above, explain what will happen to the number of firms in the industry in the long-run.

Answer 1

ANSWER:-

A).

Firms fixed cost in the some on the cost at output 0. Fixed cost = $30.

B).

Marginal cost for the 5th unit of output = (129-92) = $37.

C).

At 5th output, the marginal cost in more than market price profit-maximizing output is 4

The profit is ( 30 x 4 - 92 ) = $28

D).

The member of farms will increase on there in a profit, in the long run.

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