Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: $\begin{array}{c}
\begin{array}{c}
\
\text {Total}\
\underline{\text {Product}}\
1 \
2 \
3 \
4 \
5 \
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{c}
\text {Average}\
\text {Fixed }\
\underline{\text {Cost }}\
\$ 100.00 \
50.00 \
33.33 \
25.00 \
20.00 \
16.67 \
14.29 \
12.50 \
11.11 \
10.00 \
9.09 \
8.33
\end{array}
\begin{array}{c}
\text {Average}\
\text {Variable}\
\underline{\text {Cost}} \
\$ 17.00 \
16.00 \
15.00 \
14.25 \
14.00 \
14.00 \
15.71 \
17.50 \
19.44 \
21.60 \
24.00 \
26.67
\end{array}
\begin{array}{c}
\text {Average}\
\text {Total}\
\underline{\text {Cost}}\
\$ 117.00 \
66.00\
48.33\
39.25\
34.00\
30.67\
30.00\
30.00\
30.55\
31.60\
33.09\
35.00
\end{array}
\begin{array}{c}
\text {Marginal}\
\underline{\text {Cost}}\
\$ 17 \
15\
13\
12\
13\
14\
26 \
30\
30 \
35\
41\
48 \
56
\end{array}
\end{array}$
Refer to the data.If there were 1,000 identical firms in this industry and total or market demand is as shown below,equilibrium price will be: $$\begin{array}{l}
\begin{array} { c c }
Price& \text { Quantity Demanded }\
\hline \$ 50 & 3,000 \
42 & 6,000 \
36 & 9,000 \
32 & 11,000 \
20 & 14,000 \
13 & 19,500
\end{array}
\end{array}$$
A) $32.
B) $42.
C) $36.
D) $20.

Question

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: $\begin{array}{c}
\begin{array}{c}
\
\text {Total}\
\underline{\text {Product}}\
1 \
2 \
3 \
4 \
5 \
6 \
7 \
8 \
9 \
10 \
11 \
12
\end{array}
\begin{array}{c}
\text {Average}\
\text {Fixed }\
\underline{\text {Cost }}\
\$ 100.00  \
50.00 \
33.33 \
25.00 \
20.00 \
16.67 \
14.29 \
12.50 \
11.11 \
10.00 \
9.09 \
8.33
\end{array}
\begin{array}{c}
\text {Average}\
\text {Variable}\
\underline{\text {Cost}} \
\$ 17.00 \
16.00 \
15.00 \
14.25 \
14.00 \
14.00 \
15.71 \
17.50 \
19.44 \
21.60 \
24.00 \
26.67
\end{array}
\begin{array}{c}
\text {Average}\
\text {Total}\
\underline{\text {Cost}}\
 \$ 117.00 \
66.00\
48.33\
39.25\
34.00\
30.67\
30.00\
30.00\
30.55\
31.60\
33.09\
35.00
\end{array}
\begin{array}{c}
\text {Marginal}\
\underline{\text {Cost}}\
 \$ 17 \
15\
13\
12\
13\
14\
26 \
30\
30 \
35\
41\
48 \
56
\end{array}
\end{array}$
 Refer to the data.If there were 1,000 identical firms in this industry and total or market demand is as shown below,equilibrium price will be: $$\begin{array}{l}
\begin{array} { c c }
Price& \text { Quantity Demanded }\ 
\hline \$ 50 & 3,000 \
42 & 6,000 \
36 & 9,000 \
32 & 11,000 \
20 & 14,000 \
13 & 19,500
\end{array}
\end{array}$$
A) $32.
B) $42.
C) $36.
D) $20.

Quizplus · Accepted Answer

In a purely competitive market, firms are price takers, which means they have no control over the market price. The market price is determined by the intersection of market demand and market supply. In this case, the market demand is given and assuming there are 1,000 identical firms, the market supply would be 14,000,000 units (14,000 units per firm * 1,000 firms). The equilibrium price is where the quantity supplied equals the quantity demanded, which is at a price of $36 where 9,000 units are demanded and supplied. Therefore, the best choice is C) $36.

Answer the Question on the Basis of the Following Cost