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# pcap3 - Indicate it in the graph you have drawn c Is Jolly...

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Additional Problem 3: Pure Competition 1. Suppose Jolly Pony, a rocking-chair manufacturing company, is a perfectly competitive firm in an industry in which there are 1,000 identical firms. Jolly Pony's total cost is related to output per day as follows: Quantity Total Cost 0 \$ 500 1 1,000 2 1,300 3 1,500 4 1,800 5 2,200 6 2,700 7 3,300 8 4,000 a) Add columns to the above table for total fixed cost, total variable cost, average total cost, average variable cost and marginal cost at each level of output in the space provided. b) Plot the average total cost, average variable cost, and marginal cost curves for Jolly Pony in the space provided below. What is Jolly Pony's supply curve?

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Unformatted text preview: Indicate it in the graph you have drawn. c) Is Jolly Pony operating in the short run or long run? . Give 2 reasons for this answer: (1) (2) d) How many chairs would Jolly Pony produce at prices of \$300? ; \$400? ; \$500? ; \$600? . Write the conditions that you used to arrive at these answers here: e) Assuming that the market price is \$500, use the total approach to show the short run equilibrium for Jolly Pony. Use the space below for your answer. f) Given the above cost information, Jolly Pony's breakeven price is? . And Jolly Pony's shut-down price is? . Show these prices in your graph for part (b)....
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