LG6 - 5 Given the industry demand and supply for the good...

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University of Wisconsin Department of Economics Economics 101: Principles of Microeconomics Korinna K. Hansen Learning Guide 6 Due Date: Week of Monday, October 25, 2010 Reading Assignment: Case & Fair Chapter 8 (not the appendix) & relevant lecture material. Problem Assignment: Problems 6, 8 on page 175. Objectives: After completing the assignment you should be able to do the following: 1. Define total cost (TC), variable cost (VC) and fixed cost (FC) for a firm. 2. Define marginal cost (MC), average cost (AC), average variable cost (AVC), and average fixed cost (AFC) for a firm. 3. Given the total cost (TC) or total variable cost (TVC) derive the marginal cost (MC). 4. Given the total cost (TC) for a firm, derive the average cost (AC), average variable cost (AVC) and the average fixed cost (AFC).
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Unformatted text preview: 5. Given the industry demand and supply for the good derive the average revenue (AR) and marginal revenue (MR) curve for the representative competitive firm. 6. Given the total revenue for the representative competitive firm you should be able to calculate the average and the marginal revenue, and given the total revenue curve you should be able to graph the average and marginal revenue curves. 7. Describe the equilibrium behavior for a profit-maximizing competitive firm. What is the equilibrium quantity and why? Are there any economic profits? Can you calculate them? Can you show them on the graph? 8. Understand the exact relationship between short-run supply curve for a firm and marginal cost. 9. Explain what the shut down point for the representative firm is. Be able to show it on a graph....
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