Asked by
Kanbiro Orkaido
on Oct 08, 2024Verified
Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: TotalProduct‾123456789101112AverageFixed Cost ‾$100.0050.0033.3325.0020.0016.6714.2912.5011.1110.009.098.33AverageVariableCost‾$17.0016.0015.0014.2514.0014.0015.7117.5019.4421.6024.0026.67AverageTotalCost‾$117.0066.0048.3339.2534.0030.6730.0030.0030.5531.6033.0935.00MarginalCost‾$17151312131426303035414856\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}TotalProduct123456789101112AverageFixed Cost $100.0050.0033.3325.0020.0016.6714.2912.5011.1110.009.098.33AverageVariableCost$17.0016.0015.0014.2514.0014.0015.7117.5019.4421.6024.0026.67AverageTotalCost$117.0066.0048.3339.2534.0030.6730.0030.0030.5531.6033.0935.00MarginalCost$17151312131426303035414856
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: Price Quantity Demanded $503,000426,000369,0003211,0002014,0001319,500\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}Price$504236322013 Quantity Demanded 3,0006,0009,00011,00014,00019,500
A) $32.
B) $42.
C) $36.
D) $20.
Equilibrium Price
The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in market balance.
Market Demand
The total demand for a product or service within a particular market, including all consumers' willingness and ability to purchase at various prices.
Purely Competitive Market
A market structure characterized by a large number of firms or sellers, each of which has a relatively small market share and sells a homogeneous product, with no single firm able to influence market price.
- Understand the relationship between market demand and equilibrium price in purely competitive markets.
Verified Answer
YP
Learning Objectives
- Understand the relationship between market demand and equilibrium price in purely competitive markets.