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Assume the following cost data are for a purely competitive producer:
$$\begin{array}{ccccc}
\hline \begin{array}{c}
\text { Total } \\
\text { Product }
\end{array} & \begin{array}{c}
\text { Average } \\
\text { Fixed cost }
\end{array} & \begin{array}{c}
\text { Average } \\
\text { Variable cost }
\end{array} & \begin{array}{c}
\text { Average } \\
\text { Total cost }
\end{array} & \begin{array}{c}
\text { Marginal } \\
\text { cost }
\end{array} \\
\hline 0 \\
1 & \$ 60.00 & \$ 45.00 & \$ 105.00 & \$ 45 \\
2 & 30.00 & 42.50 & 72.50 & 40 \\
3 & 20.00 & 40.00 & 60.00 & 35 \\
4 & 15.00 & 37.50 & 52.50 & 30 \\
5 & 12.00 & 37.00 & 49.00 & 35 \\
6 & 10.00 & 37.50 & 47.50 & 40 \\
7 & 8.57 & 38.57 & 47.14 & 45 \\
8 & 7.50 & 40.63 & 48.13 & 55 \\
9 & 6.67 & 43.33 & 50.00 & 65 \\
10 & 6.00 & 46.50 & 52.50 & 75 \\
\hline
\end{array}$$
a. At a product price of $\$ 56,$ will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output?
b. Answer the relevant questions of 4 a assuming product price is $\$ 41$
c. Answer the relevant questions of 4 a assuming product price is $\$ 32$
d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2 ) and indicate the profit or loss incurred at each output (column 3).
$$\begin{array}{cccc} \hline
\begin{array}{c}
\text { (1) } \\
\text { Price }
\end{array} & \begin{array}{c}
\text { (2) } \\
\text { Quantity } \\
\text { Supplied, } \\
\text { Single Firm }
\end{array} & \begin{array}{c}
\text { (3) } \\
\text { Profit }(+) \\
\text { or Loss }(-)
\end{array} & \begin{array}{c}
\text { (4) } \\
\text { Quantity } \\
\text { Supplied } \\
1500 \text { Firms }
\end{array} \\
\hline \$ 26 & \text {_____} & \$ \text {_____} & \text {_____} \\
32 & \text {_____} & \text {_____} & \text {_____} \\
38 & \text {_____} & \text {_____} & \text {_____} \\
41 & \text {_____} & \text {_____} & \text {_____}\\
46 & \text {_____} & \text {_____} & \text {_____} \\
56 & \text {_____} & \text {_____} & \text {_____} \\
66 & \text {_____} & \text {_____} & \text {_____} \\
\hline
\end{array}$$
e. Explain: "That segment of a competitive firm's marginalcost curve that lies above its average-variable-cost curve constitutes the short-run supply curve for the firm." Illustrate graphically.
f. Now assume that there are 1500 identical firms in this competitive industry; that is, there are 1500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4).
g. Suppose the market demand data for the product are as follows:
$$\begin{array}{|cc|}
\hline \text { Price } & \begin{array}{c}
\text { Total Quantity } \\
\text { Demanded }
\end{array} \\
\hline \$ 26 & 17,000 \\
32 & 15,000 \\
38 & 13,500 \\
41 & 12,000 \\
46 & 10,500 \\
56 & 9500 \\
66 & 8000 \\ \hline
\end{array}$$
What will be the equilibrium price? What will be the equilibrium output for the industry? For each firm? What will profit or loss be per unit? Per firm? Will this industry expand or contract in the long run?