Microeconomics 14th Edition by James Gwartney ,Richard Stroup,Russell Sobel ,David Macpherson

Exercise 3

In the accompanying table, you are given information about two firms that compete in a price-taker market. Assume that fixed costs for each firm are $20.
a. Complete the table.
b. What is the lowest price at which firm A will produce?
c. How many units of output will it produce at that price? (Assume that it cannot produce fractional units.)
d. What is the lowest price at which firm B will produce?
e. How many units of output will it produce?
f. How many units will firm A produce if the market price is $20?
g. How many units will firm B produce at the $20 price? (Assume that it cannot produce fractional units.)
h. If each firm's total fixed costs are $20 and the price of output is $20, which firm would earn a higher net profit or incur a smaller loss?
i. How much would that net profit or loss be?
*Asterisk denotes questions for which answers are given in Appendix B.