June 29, 2016

Homework Help: To: Economyst

Posted by cb on Wednesday, November 4, 2009 at 8:11pm.

Hi there. You helped me with a couple of questions regarding Econ. I appreciate the help but my issue is I don't understand how you calculate the minimum average variable cost or the output that maximizes profit. I do understand that the price is more than the AVC so they should keep producing in the short run to cover some of the fixed costs. I appreciate your help. Thank you.

In a perfectly competitive industry, the market price is $25. A firm is currently producing 10,000 units of output, its average total cost is $28, its marginal cost is $20, and its average variable cost is $20. Given these facts, explain whether the following statements are true or false, and why.

a. The firm is currently producing at the minimum average variable cost.

b. The firm should produce more output to maximize profit.
c. Average total cost will be less than $28 at the level of output that maximizes the firm’s

Economics/Math - economyst, Wednesday, November 4, 2009 at 9:11am
take a shot, what do you think.

Hint: true, true, true

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