Answer to Question #46924 in Economics of Enterprise for Tebr

Question

Assume that a firm in a perfectly competitive industry has the following total cost schedule:

Output Units Total Cost ($)
10 $110
15 150
20 180
25 225
30 300
35 385
40 480

a. Calculate a marginal cost and an average cost schedule for the firm

b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are profits per unit? What are total profits?

c. Is the industry in long run equilibrium at this price