HW3 10-21-09 - ECO 304K INTRO MICRO Fall 2009 Hickenbottom...

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ECO 304K INTRO MICRO Fall 2009 Hickenbottom HOMEWORK #3 (Due October 21 at 1pm) 1. A firm in a perfectly competitive market will produce 0 output in the short run if the price is below $13. The smallest quantity they will produce in the short run is 10. The minimum of ATC is $20 at a quantity of 20. The fixed cost is $100. a) Draw a picture of the MC, ATC, and AVC for this firm labeling as much specific information as you can from the information above. (2 points) b) If the firm is producing at constant returns to scale at a quantity of 20, find the long run equilibrium price and market quantity demanded if there are 60 firms in the long run. (1 point) 2. Answer the following based on the table below which is the cost of one firm in a perfectly competitive market. Q FC VC TC MC AVC AFC ATC 0 150 NA NA NA NA 1 15 2 14 3 40 4 202 5 43 6 14 7 95 8 263 9 21 10 15.9 a) Fill in the missing items in the following table. I would suggest completing the table, cut it out, and paste it (either electronically or physically) into your sheet
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This note was uploaded on 08/24/2011 for the course ECO 304K taught by Professor Hickenbottom during the Fall '10 term at University of Texas at Austin.

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HW3 10-21-09 - ECO 304K INTRO MICRO Fall 2009 Hickenbottom...

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