Econ_101_HW_07_ch_13_Fall_2011

Econ_101_HW_07_ch_13_Fall_2011 - Economics 101 Fall 2011...

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E c o n o m i c s 1 0 1 N a m e : Fall 2011 Homework #7 Due Thursday, October 27, 2011 Each question is worth 4 points except question 1, which is worth 16 points. For questions 1 to 27, refer to the table and other information given for Problem 4 on page 352 in the textbook. Assume that DVD production is a perfectly competitive industry. Also assume that there is free entry into the industry, and anyone who enters will face the same cost structure as Bob. Assume that there is no other way to run the business at a different scale with fixed costs that are different from those that Bob has. Assume that Bob's goal is to maximize his profits. 1. Complete the following table. Put the marginal cost of one DVD for the first 1000 DVDs on the line for 1000 DVDs, the marginal cost for each of the 1001 st through 2000 th DVD on the line for 2000 DVDs, etc. Fill in the table for the short run, assuming that Bob will incur his fixed costs even if he produces zero output. (16 points) Quantity of DVDs
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Econ_101_HW_07_ch_13_Fall_2011 - Economics 101 Fall 2011...

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