Please answer all parts of the following question. Given the following information: Total Product (TP) Price Fixed
Question:
Please answer all parts of the following question.
- Given the following information:
Total Product (TP) Price Fixed Cost (TFC) Variable Cost (TVC)
0 $1000 $600 $ 0
1 1000 600 1200
2 1000 600 2000
3 1000 600 2700
4 1000 600 3200
5 1000 600 4200
6 1000 600 5400
A. Based upon the numbers from the table above, is this firm is operating in the short-run or
the long-run? How do you know which time period it is operating in? (4 points)
B. Based upon the numbers from the table above, how do you know that this firm
exemplifies a purely competitive firm? (2 points)
C. Solve for total cost (TC), average fixed cost (AFC), average variable cost (AVC),
average total cost (ATC), marginal cost (MC), total revenue (TR), and marginal revenue
(MR) at every total product quantity. (36 points)
D. Graph the fixed cost (TFC), variable cost (TVC), and total cost (TC) curves all on the same graph (7 points)
E. What is the profit maximizing level of total product (TP) in this example? (3 points)
F. At a quantity of 1, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
G. At a quantity of 2, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
H. At a quantity of 3, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
I. At a quantity of 4, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
J. At a quantity of 5, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
K. At a quantity of 6, will this firm produce or shutdown? Explain.
How much of a profit or loss does the firm incur based upon their decision to produce or
shutdown? (8 points)
Expert Answer:
Answer A Based on the information provided in the table this firm is operating in the shortrun The k... View the full answer
