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Profit Maximization

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A-Complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3)

1 2 3 4
Price Quantity Supplied Profit(+) Quantity Supplied
Single Firm or Loss(-) 1500 Firms
$26
32
38
41
46
56
66

b-Now assume that there are 1500 identical firms in this competitive industry: that is, there are 1500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4)

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Solution Summary

The solution completes the short run supply schedule for the scenario given and also answers a number of other related questions.

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Total Average Average Average Marginal
Product Fixed Cost Variable Cost Total Cost Cost
0
1 $60.00 $45.00 $105.00 $45
2 30.00 42.50 72.50 40
3 20.00 40.00 60.00 35
4 ...

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