Question
The table below gives the total cost (TC in $) of producing watches at different levels...
The table below gives the total cost (TC in $) of producing watches at different levels of output for a firm in a perfectly competitive market.
|
Output |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
TC |
20 |
45 |
66 |
85 |
100 |
114 |
126 |
141 |
160 |
183 |
210 |
|
MC |
- |
(a) What is the fixed cost of this firm?
(b) Complete the last row of the table (i.e., calculating the marginal cost (MC) of the 1st to the 10th watch).
(c) If the market price of watch is $23, what would be the profit maximizing output?
(d) If the market price of watch falls to $15, how much would you recommend the firm to produce? Explain your answer.
Homework Answers
Answer #1
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