


Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
The short-run cost functions for a perfectly competitive firm producing gadgets, including average total cost (atc), average variable cost (avc), marginal cost (mc), and quantity produced. The homework assignment requires finding the total fixed costs, profit-maximizing output levels, and total economic profit for given market prices, as well as determining the output levels and profit status for three different market prices based on the given cost functions.
Typology: Assignments
1 / 4
This page cannot be seen from the preview
Don't miss anything!
The following short-run cost functions are for a perfectly competitive firm that produces gadgets: QUANTITY OF GADGETS (Q)
a. Find the firm’s TOTAL FIXED COSTS? (If you get a number with a decimal place, round to the nearest whole number ). EXPLAIN YOUR REASONING AND SHOW CALCULATIONS. (4 points) b. For each of the following market prices , find: The profit-maximizing (loss-minimizing) level of output The total economic profit that will be earned at the profit- maximizing level of output. SHOW ALL CALCULATIONS AND EXPLAIN YOUR REASONING CLEARLY. (21 points) i. Price = $3.50.
ii. Price = $2.50. iii. Price = $1.50.
b. If the price of the product is $100, how many units of output should the firm produce? Explain your reasoning briefly. Is total economic profit greater than, less than, or equal to zero and how can you tell (no numerical calculation is possible). (5 points) c. If the price of the product is $40, how many units of output should the firm produce? Explain your reasoning briefly. Is total economic profit greater than, less than, or equal to zero and how can you tell (no numerical calculation is possible). (5 points)