Chapter 7 Transcribed Image Text: A purely competitive firm finds that the market price for its product is $20.00. It has a fixed cost of

Chapter 7 Transcribed Image Text: A purely competitive firm finds that the market price for its product is $20.00. It has a fixed cost of $100.00 and a variable cost of
$15.00 per unit for the first 50 units and then $25.00 per unit for all successive units.
Instructions: Round your answers to 2 decimal places.
a. Does price equal or exceed average variable cost for the first 50 units? Yes
What is the average variable cost for the first 50 units? $
b. Does price equal or exceed average variable cost for the first 100 units?
Yes
What is the average variable cost for the first 100 units? $
c. What is the marginal cost per unit for the first 50 units? $
per unit.
What is the marginal cost for units 51 and higher? $
per unit.
d. For each of the first 50 units, does MR exceed MC? Yes
What about for units 51 and higher? No
e. What output level will yield the largest possible profit for this purely competitive firm?
units.
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