Assume that a firm in a perfectly competitive industry has the following total cost schedule:

OUTPUT (UNITS)	TOTAL COST ($)
10	$220
15	300
20	360
25	450
30	600
35	770
40	960

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?

Answer rating: 100% (QA)

a Marginal cost and average cost schedule Marginal cost refers to the addition to the total cost due ... View the full answer