Chapter 9: Practice Work Sheet 2 Economic Profit Average Variable Cost Average Total Cost Average Fixed Costs Marginal Ravenuo 4100 Market Total Price Quy Total Marginal Revenue Cost Cost $4.00 O $10.20 $4.00 1 4:00 $14.20 $4.00 2 Yoo $17.80 3.10 $4.00 3 200 $4.00 $20.60 4 $23.10 $4.00 5 $25.70 $4.00 6 240p $28.50 $4.00 7 48.00 $31.50 $4.00 8 3200 $34.70 $4.00 9 36.00 $38.10 $4.00 10 41000 $41.70 $4.00 11 14:00 $45.50 $4.00 12 46.00 $49.50 $4.00 13 5200 $53.70 $4.00 14 56.00 $58.20 $4.00 15 563.20 1. How much are the total Fixed Costs for this firm? 2. What is the average variable cost of the each unit when 14 units are produced? 3. At what level of output does the Marginal Revenue = Marginal Cost? 4. At what level of output will profits be maximized? 5. How much profit (total) will this firm make when it maximizes profit in the short-run? 6. Assuming this firm is in perfect competition and all firms in the industry are having similar results, over the long-run would you expect the number of firms in this industry to increase, decrease, or remain the same? 7. Let's assume that market conditions have changed. The new short-run equilibrium market price is now $4.50 each. How many units will this firm choose to produce now? 8. How much total profit will this firm make now that the price has risen to $4.50 each? 9. Again, assuming this is perfect competition, will the price of $4.50 represent a long-run equilibrium? (yes, no, or can't tell) 10. Again, assuming this is perfect competition, how much total profit will this firm make when the industry and market eventually do achieve long-run equilibrium