pcap1ans - 6 Thus quantity produced will never be less than...

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Additional Problem 1 Answers : Pure Competition Given the following cost functions and revenue lines for a purely competitive firm choose correct answers to the following questions below. a) This purely competitive firm is operating in the short run (short run, long run). b) The firm will break even when the price is $ 12 . Under this condition, quantity will be 45 . Total revenue will be $ 540 and total cost will be $ 540 . $ 18 16 12 9 6 5 4 16 25 30 38 45 52 55 Q 0 MC ATC AVC
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c) If price is $18, the firm will produce 55 . This position yields a profit (profit, loss, break even) for the firm of < $330 ($333, > $330, < $330). d) The optimal level of output is zero when price falls below $
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Unformatted text preview: 6 . Thus , quantity produced will never be less than 30 . e) If price is $9, the firm will realize a loss (profit, loss, break even) of > $114 (< $114, $114, >$114). As a result the firm will continue production (continue production, shutdown, break even). If the firm continues production, output will be 38 . f) Average total cost is at minimum when price is $ 12 . Average variable cost is at a minimum when price is $ 6 . The slope of total cost is at its flattest point when price is $ 4 . g) At the shutdown level of output and price, we know that total variable cost is $ 180 . At this same position, total fixed cost is > $180 (> $180, $180, <$180)....
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This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

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pcap1ans - 6 Thus quantity produced will never be less than...

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