Assume that a firm in a perfectly competitive industry has the following total cost schedule:
OUTPUT (UNITS) TOTAL COST ($)
10 ............. $110
15 .............. 150
20 .............. 180
25 .............. 225
30 .............. 300
35 .............. 385
40 .............. 480
a. Calculate a marginal cost and an average cost schedule for the firm.
b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are profits per unit? What are total profits?
c. Is the industry in long-run equilibrium at this price?