ch 9 hw - Quantity of DVDs Fixed cost Variable cost 0 1,000...

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Quantity of DVDs Fixed cost Variable cost Average variable cost Total cost Average total cost Marginal cost 0 50,000 0 - 50,000 - 1,000 50,000 5,000 5 55,000 55 5 2,000 50,000 8,000 4 58,000 29 3 3,000 50,000 9,000 3 59,000 19.67 1 4,000 50,000 14,000 3.5 64,000 16 5 5,000 50,000 20,000 4 70,000 14 6 6,000 50,000 33,000 5.5 83,000 13.83 13 7,000 50,000 49,000 7 99,000 14.14 16 8,000 50,000 72,000 9 122,000 15.25 23 9,000 50,000 99,000 11 149,000 16.56 27 10,000 50,000 150,000 15 200,000 20 51 4. a. calculate Bob’s average variable cost, average total cost, and marginal cost for each quantity of output b. there is a free entry into industry, and anyone who enters will face the same cost as Bob. Suppose that currently the price of a DVD is $25. What will Bob’s profit be? Is this a long run equilibrium? If not, what will the price of DVD movies be in the long run? Quantity of DVDs Price Total revenue Total cost Economic profit 0 25 0 50,000 -50,000 1,000 25 25,000 55,000 -30,000 2,000 25 50,000 58,000
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This document was uploaded on 11/02/2011 for the course ECONOMIC ec 202 at Montgomery.

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ch 9 hw - Quantity of DVDs Fixed cost Variable cost 0 1,000...

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