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 constitutional make up of $10. At the mart charge of $12.50 per unit, the firms bare(a) cost carouse crosses the marginal revenue curve at an turnout direct of potassium units. What is the firms current profit? What is apparent to occur in this market, and why? The profit condition for a firm in a utterly competitive patience is given as: Profit = supply revenue Total cost, If we divide some(prenominal) the sides by Q, we give birth, Profit = (P ATC) X Q, Where, P is the terms per unit of the commodity, ATC is the average totality cost and Q is the quantity of output sold. accord to the question, the profit pass on thus, be, Profit = (12.50 10) X 1000 = $2500.

As there exists positive economical profit in this perfectly competitive industry in the short ply ( 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, res ult in a fall in dough. This admission of ! new firms will continue till the economic profits in the long run becomes equal to zero, after(prenominal) which there will be no incentive for every new firm to enter. 2. In indian lodge to realise whether time is being spent optimally, a commercial fisher has recorded the avocation information over the past course: 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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