Microeconomics Wa 3

Top of Form [pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic] DINAH KOFIE WRITTEN ASSIGNMENT 3 1. At its current take of production, a profit-maximizing firm in a free-enterprise(a) trade receives $12.50 for each unit it produces and faces an average original make up of $10. At the food market charge of $12.50 per unit, the firms fringy cost carouse crosses the marginal revenue curve at an issue direct of chiliad units. What is the firms current profit? What is potential to occur in this market, and why? The profit condition for a firm in a utterly competitive attention is given as: Profit = sum ingrained revenue Total cost, If we divide some(prenominal) the sides by Q, we wedge, Profit = (P ATC) X Q, Where, P is the set per unit of the commodity, ATC is the average total cost and Q is the quantity of output sold. accord to the question, the profit bequeath thus, be, Profit = (12.50 10) X 1000 = $2500.

As there exists positive stinting profit in this perfectly competitive industry in the short tie ( as the price exceeds the average total cost), overbold firms will be attracted to enter the industry. As new firms enter the industry, the total market production increases, this will bring down the market price and thus, result in a fall in dough. This admission of new fir! ms will continue till the economic profits in the long run becomes equal to zero, afterwards which there will be no incentive for both new firm to enter. 2. In indian lodge to train whether time is being spent optimally, a commercial black cat has recorded the avocation information over the past socio-economic class: minute of arcs spent sportfishing and quantity of fish caught. What is the marginal product of fishing for hour spent? |Hours/day...If you want to get a full essay, order it on our website: BestEssayCheap.com

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