Answer to Question #157251 in Microeconomics for Fahad Baig

Question

A perfectly competitive firm has the following total cost function:



Total output

Total Cost

0

20

1

30

2

42

3

55

4

69

5

84

6

100

7

117



How much will the firm produce if the price of the production the market is Rs. 14 per unit? How will it change its output if price rises to Rs. 16 per unit?

Answer 1

Total output TC MC

0 20 -

1 30 10

2 42 12

3 55 13

4 69 14

5 84 15

6 100 16

7 117 17

If p=14, Q=4

If p=16, Q=6