Sunrise Juice Company Sells Its Output in a Perfectly Competitive

Essay

Sunrise Juice Company sells its output in a perfectly competitive market.The firm's total cost function is given in the following schedule: $$\begin{array} { c c } \text { Output } & \text { Total Cost } \\\text { (Units) } & ( \$ ) \\\hline 0 & 50 \\10 & 120 \\20 & 170 \\30 & 210 \\40 & 260 \\50 & 330 \\60 & 430\end{array}$$ Total costs include a "normal" return on the time (labor services)and capital that the owner has invested in the firm.The prevailing market price is $7 per unit. (a) Prepare (i) marginal cost and (ii) average total cost schedules for the firm.
(b) What is the firm's profit maximizing output level?
(c) Is the industry in long-tun equilibrium? Justify your answer.