Question

The market for durian in Kuala Terengganu is competitive and has the following demand schedule:

Price

1

2

3

4

5

6

7

8

9

10

11

12

13

Quantity Demanded

1200

1100

1000

900

800

700

600

500

400

300

200

100

Compute each seller’s total cost and average total cost for selling 1 to 6 durians.

Answer 1

Solution:

The calculations of total cost and average total cost for selling 1 to 6 durians are as below: