[related to solved problem #3] suppose that andy sells basketballs in the perfectly competitive basketball market. his output
per day and his costs are as follows: output per day total cost variable cost average total cost average variable cost marginal cost 0 $10.00 $0 -- -- -- 1 15.00 5 $15.00 $5.00 $5.00 2 17.50 7.50 8.75 3.75 2.50 3 22.50 12.50 7.50 4.17 5.00 4 30.00 20.00 7.50 5.00 7.50 5 40.00 30.00 8.00 6.00 10.00 6 52.50 42.50 8.75 7.08 12.50 7 67.50 57.50 9.64 8.21 15.00 8 85.00 75.00 10.63 9.38 17.50 9 105.00 95.00 11.67 10.56 20.00 suppose the equilibrium price of basketballs is $2.50. in the short run, how many basketballs will andy produce? 22 (enter a whole number).
1 answer:
Answer:
The data are not clearly written, the diagram attached gives a clear expression of the given data.
0 basketballs will be produced in the short run
Step-by-step explanation:
The equilibrium price = $2.50
Marginal cost is the change in the total cost that arises when the quantity produced is incremented by one unit; that is, it is the cost of producing one more unit of a good.
By properly observing the marginal cost column in the given table, we would see that there is nowhere the marginal cost is less than the equilibrium price pf $2.50
Since marginal cost varies with the level of production, For their to be the production of basket ball, MC < Equilibrium price. This means that there will be no production of basketballs in the short run
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