A purely competitive firm finds that the market price for its product is $30.00. It has a fixed cost of $100.00 and a variable cost of $17.50 per unit for the first 50 units and then $35.00 per unit for all successive units.
Instructions:?Round your answers to 2 decimal places.
a. Does price equal or?exceed average variable cost for the first 50 units?
(Click to select)YesNo
.
???What is the average variable cost for the first 50 units??$.
b. Does price equal or?exceed average variable cost for the first 100 units? ?
(Click to select)NoYes
.
???What is the average variable cost for the first 100 units??$.
c. What is the marginal cost per unit for the first 50 units??$?per unit.
??What is the marginal cost for units 51 and higher??$?per unit.
d. For each of the first 50 units, does MR exceed MC?
(Click to select)YesNo
.
??What about for units 51 and higher?
(Click to select)YesNo
.
e. What output level will yield the largest possible profit for this purely competitive firm?units.