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Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026 Exercise 6
Below is the cost function for a business producing beach chairs:
a) Fill in the column for marginal cost.
b) Assume the business is operating under conditions of perfect competition. If the market price is $14 per chair, how many chairs does the business produce? What is the total profit of the business?
c) If the market price is $13 per chair, how many chairs does the business produce? What is the total profit of the business?
d) If the price is $14 per chair, will more businesses want to enter the market? What will happen to supply then? What will happen to the price?
e) If the price is $13 per chair, will more businesses want to enter the market? In the long-term, will the market price be higher or lower than $13?
a) Fill in the column for marginal cost.
b) Assume the business is operating under conditions of perfect competition. If the market price is $14 per chair, how many chairs does the business produce? What is the total profit of the business?
c) If the market price is $13 per chair, how many chairs does the business produce? What is the total profit of the business?
d) If the price is $14 per chair, will more businesses want to enter the market? What will happen to supply then? What will happen to the price?
e) If the price is $13 per chair, will more businesses want to enter the market? In the long-term, will the market price be higher or lower than $13?
Explanation
Verified
Verified
Given:
(a)Marginal costs refer to the...
Economics: The Basics 1st Edition by Mike Mandel
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