Question

​[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).

Answer 1

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