A perfectly competitive firm faces a price of 14 per unit. It has the following short...

 

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A perfectly competitive firm faces a price of 14 per unit. It has the following short run cost schedule: Output 0 1 2 3 4 5 6 Total Cost 10 18 24 30 38 50 64 91 120 Find the following: i) Marginal cost for each level of output ii) Equilibrium level of output iii) Whether the firm concerned experiences the shut- down point. (b) If the total cost (TC) function for a monopolist is given by the equation: TC = 500 + 25Q and the demand function for the good produced by the monopolist is given by Q=25- 0.05P, find the profit maximizing price and quantity, and maximized profit of the monopolist. 7 8 (a) A Company has identified two mutually exclusive investment proposals. The details of both the Proposals are given in the following table. Find the better alternative on the basis of rate of return method of comparison. Particulars Investment (3) Annual Net Income (3) Life Salvage Value Minimum Attractive rate of return Alternative A B 210000 255000 58260 69000 5 yrs Nil 10% 5 yrs Nil A perfectly competitive firm faces a price of 14 per unit. It has the following short run cost schedule: Output 0 1 2 3 4 5 6 Total Cost 10 18 24 30 38 50 64 91 120 Find the following: i) Marginal cost for each level of output ii) Equilibrium level of output iii) Whether the firm concerned experiences the shut- down point. (b) If the total cost (TC) function for a monopolist is given by the equation: TC = 500 + 25Q and the demand function for the good produced by the monopolist is given by Q=25- 0.05P, find the profit maximizing price and quantity, and maximized profit of the monopolist. 7 8 (a) A Company has identified two mutually exclusive investment proposals. The details of both the Proposals are given in the following table. Find the better alternative on the basis of rate of return method of comparison. Particulars Investment (3) Annual Net Income (3) Life Salvage Value Minimum Attractive rate of return Alternative A B 210000 255000 58260 69000 5 yrs Nil 10% 5 yrs Nil

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a i Marginal cost for each level of output Output 0 1 2 3 4 5 6 7 8 MC 10 14 12 4 6 7 8 9 ii Equilib... View the full answer