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This question was created from CH 7 Practice Problems II.docx https://www.coursehero.com/file/46877779/CH-7-Practice-Problems-IIdocx/

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CH ? Practice Problems 1. Suppose that the manager of a firm operating in a perfectly:r competitive market has
estimated the average variable cost function to be: AVG = 4.0 _ 0.00244; + [tortuousq2 Fixed costs are $500. If the forecasted price of the firm’s output is $5.00, how much output will
the firm produce in the short run (round to the nearest unit)? Profits? 2. Bong-Bong produce orange juice concentrate that operates in the competitive market.
Estimated number of firms are 200. Suppose that the manager of the firm operating in a competitive market has estimated the firm’s average variable cost function to be
AVC=10-U.03q+fl.00005q2 and the total fixed cost is $600. a) What is the corresponding marginal cost function?
b) At what output is AVG at its minimum? c) ‘What is the roinimum value for AVG? d) What is the shut-down price for this company?

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1) Output = 200 unit Profit = $496... View the full answer

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