The table below shows cost data for producing different amounts of cleaning products. Use the given information to answer the questions below. Quantity Total Cost in $ Variable Cost in $ Marginal Cost in $ 0 283 0 -- 15 358 75 5 30 448 165 6 45 658 375 14 60 958 675 20 75 1318 1035 24 How many would a competitive firm produce if the market price was $20? 60 If the market price is $20, will firms enter or exit the market? OEnter OExit
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Step 1: Calculate the quantity that a competitive firm would produce if the market price was $20 by setting marginal cost equal to the market price. Show more…
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Consider total cost and total revenue given in the following table: $$\mathrm{Quantity} \quad 0\quad 1\quad 2\quad 3\quad 4\quad 5\quad 6\quad 7 $$ $$\mathrm{Total cost} \quad$8\quad 9\quad 10\quad 11\quad 13\quad 19\quad 27\quad 37 $$ $$\mathrm{Total revenue}\quad $0\quad 8\quad 16\quad 24\quad 32\quad 40\quad 48\quad 56 $$ a. Calculate profit for each quantity. How much should the firm produce to maximize profit? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. ($Hint$: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2 $1\over2$.) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium?
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