(Table: Demand Schedule for Whatchamacallits) Use Table: Demand Schedule of Whatchamacallits. The market for whatchamacallits consists of two producers, Emma and Joshua. Each firm can produce whatchamacallits with no marginal cost or fixed cost. If industry output is 700, each firm's profits will be than they would be at the output of 500, which maximizes industry profit. Table: Demand Schedule for Whatchamacallits Quantity of Whatchamacallits Price of a Whatchamacallit $10 9 8 7 6 5 4 3 2 1 0 O a. $150 less O b. $150 more O c. $200 more O d. $200 less Demanded 0 100 200 300 400 500 600 700 800 900 1,000

(Table: Demand Schedule for Whatchamacallits) Use Table: Demand Schedule of Whatchamacallits. The market for whatchamacallits consists of two producers, Emma and Joshua. Each firm can produce whatchamacallits with no marginal cost or fixed cost. If industry output is 700, each firm's profits will be than they would be at the output of 500, which maximizes industry profit. Table: Demand Schedule for Whatchamacallits Quantity of Whatchamacallits Price of a Whatchamacallit $10 9 8 7 6 5 4 3 2 1 0 O a. $150 less O b. $150 more O c. $200 more O d. $200 less Demanded 0 100 200 300 400 500 600 700 800 900 1,000

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 9PA

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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.
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