Sunrise Juice Company sells its output in a perfectly competitive market.The firm's total cost function is given in the following schedule:
Total costs include a "normal" return on the time (labor services)and capital that the owner has invested in the firm.The prevailing market price is $7 per unit.
(a) Prepare (i) marginal cost and (ii) average total cost schedules for the firm.
(b) What is the firm's profit maximizing output level?
(c) Is the industry in long-run equilibrium? Justify your answer.

Question

Sunrise Juice Company sells its output in a perfectly competitive market.The firm's total cost function is given in the following schedule:
  Total costs include a "normal" return on the time (labor services)and capital that the owner has invested in the firm.The prevailing market price is $7 per unit.
 (a)	Prepare (i) marginal cost and (ii) average total cost schedules for the firm.
(b)	What is the firm's profit maximizing output level?
(c)	Is the industry in long-run equilibrium? Justify your answer.

Quizplus · Accepted Answer

The Answer of Sunrise Juice Company sells its output in a perfectly competitive market.The firm's total cost function is given in the following schedule:
  Total costs include a "normal" return on the time (labor services)and capital that the owner has invested in the firm.The prevailing market price is $7 per unit.
 (a)	Prepare (i) marginal cost and (ii) average total cost schedules for the firm.
(b)	What is the firm's profit maximizing output level?
(c)	Is the industry in long-run equilibrium? Justify your answer.

Sunrise Juice Company Sells Its Output in a Perfectly Competitive