Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

Edition 15ISBN: 978-1285453538

Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

Edition 15ISBN: 978-1285453538

Exercise 6

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?
$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 $20, which firm would earn a higher net profit or incur a smaller loss? i. How much would that net profit or loss be?$

Explanation

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