Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: $\begin{array}{c}
\begin{array}{c}
\
Total\
Product\
\hline
1 \
2 \
3 \
4 \
5 \
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{lll}
Average\
Fixed\
Cost\
\hline
\$ 100.00 \
50.00 \
33.33 \
25.00 \
20.00 \
16.67\
14.29 \
12.50 \
11.11 \
10.00 \
9.09 \
8.33 \
\end{array}
\begin{array}{lll}
Average\
Variable\
Cost\
\hline
\$ 17.00 \
16.00 \
15.00 \
14.25 \
14.00 \
14.00 \
15.71\
17.50 \
19.44 \
21.60 \
24.00 \
26.67
\end{array}
\begin{array}{ccc}
\text { Average }\
\text { Total } &&\text { Marginal }\
\text { Cost }&&\text { Cost }\
\hline
\$ 117.00 & & \$ 17 \
66.00 & & 15 \
48.33 & & 13 \
39.25 & & 12 \
34.00 & & 13 \
30.67 & & 14 \
30.00 & & 26 \
30.00 & & 30 \
30.55 & & 35 \
31.60 & & 41 \
33.09 & & 48 \
35.00 & & 56
\end{array}
\end{array}$ Refer to the data.If the market price for the firm's product is $32,the competitive firm will produce:
A) 8 units at an economic profit of $16.
B) 6 units at an economic profit of $7.98.
C) 10 units at an economic profit of $4.
D) 7 units at an economic profit of $41.50.

Question

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: $\begin{array}{c}
\begin{array}{c}
\
Total\
Product\
\hline
1 \
2 \
3 \
4 \
5 \
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{lll}
Average\
Fixed\
Cost\
\hline
 \$ 100.00 \
 50.00 \
 33.33 \
 25.00 \
 20.00 \
16.67\
 14.29 \
 12.50 \
 11.11 \
 10.00 \
 9.09 \
 8.33 \
\end{array}
\begin{array}{lll}
Average\
Variable\
Cost\
\hline
 \$ 17.00 \
 16.00 \
 15.00 \
 14.25 \
 14.00 \
 14.00 \
15.71\
 17.50 \
19.44 \
 21.60 \
 24.00 \
 26.67 
\end{array}
\begin{array}{ccc}
\text { Average }\
\text { Total } &&\text { Marginal }\
\text { Cost }&&\text { Cost }\
\hline
 \$ 117.00 & & \$ 17 \
66.00 & & 15 \
48.33 & & 13 \
39.25 & & 12 \
34.00 & & 13 \
30.67 & & 14 \
30.00 & & 26 \
30.00 & & 30 \
30.55 & & 35 \
31.60 & & 41 \
33.09 & & 48 \
35.00 & & 56
\end{array}
\end{array}$ Refer to the data.If the market price for the firm's product is $32,the competitive firm will produce:
A) 8 units at an economic profit of $16.
B) 6 units at an economic profit of $7.98.
C) 10 units at an economic profit of $4.
D) 7 units at an economic profit of $41.50.

Quizplus · Accepted Answer

At a market price of $32, the firm will produce 8 units, where marginal cost equals price. At this output level, the firm's total revenue is $256 (8 x $32), and its total cost is $240 (8 x $30). Therefore, the firm's economic profit is $16.

Answer the Question on the Basis of the Following Cost