1. Suppose rocking chair manufacturing isa perfectly competitive industry in which there are 1,000 identical firms....

Transcribed Image Text:

1. Suppose rocking chair manufacturing isa perfectly competitive industry in which there are 1,000 identical firms. Each firm's total cost is related to output per day as follows: (15 points) Quantity Total Cost Variable Average Total Cost Average Variable Cost Marginal Cost Cost 500 1 1,000 1,300 1,500 4 1,800 5 2,200 6 2,700 7 3,300 4,000 Calculate the total variable cost, average total cost, average variable cost, and marginal cost at each output level. b. Plot the average total cost, average variable cost, and marginal cost curves for a single firm. Remember the values for marginal cost are plotted at the midpoint of the respective intervals. c. What is the firm's supply curve? (Say it in words). d. How many chairs would the firm produce at the following prices? (assume it does not produce fractions of chairs) a. Price $350 $450 Quantity Supplied by single firm $550 $650 00 3. 1. Suppose rocking chair manufacturing isa perfectly competitive industry in which there are 1,000 identical firms. Each firm's total cost is related to output per day as follows: (15 points) Quantity Total Cost Variable Average Total Cost Average Variable Cost Marginal Cost Cost 500 1 1,000 1,300 1,500 4 1,800 5 2,200 6 2,700 7 3,300 4,000 Calculate the total variable cost, average total cost, average variable cost, and marginal cost at each output level. b. Plot the average total cost, average variable cost, and marginal cost curves for a single firm. Remember the values for marginal cost are plotted at the midpoint of the respective intervals. c. What is the firm's supply curve? (Say it in words). d. How many chairs would the firm produce at the following prices? (assume it does not produce fractions of chairs) a. Price $350 $450 Quantity Supplied by single firm $550 $650 00 3.

Answer rating: 100% (QA)

1Variable cost Cost per unit Total No of Units 2ATC Total Cost Quantity the firm is producing 3Avera... View the full answer