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Chapter 1414-10The market for apple pies in the city of Ectenia is competitiveand has the following demand schedule:PriceQuantityDemanded$11,200pies21,10031,000490058006700760085009400103001120012100130Each producer in the market has fixed costs of $9 and thefollowing marginal costs:QuantityMarginal Cost1 pie$2243648510612
a.Compute each producer’s total cost and average total costfor 1 to 6 piesANSQuantityMCTVC(MCn+MCn-1)TFCTC(TVC+TFC)ATC(TC/Q)1 pie$22911112469157.53612921748209297.25510309397.8612429518.5b. The price of a pie is now $11. How many pies are sold? How many pies does each producer make? How many producers are there? How much profit does each producer earn?marginal revenue is $11, each firm will choose to produce5 pies. Therefore, there will be 40 firms (= 200/5). Eachproducer will earn total revenue of $55 ($11