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Short run marginal costs and supply scenario

Tinley Paper, Inc. produces uncoated paper used in a wide variety of industrial applications. Newsprint, a major product, is sold in a perfectly competitive market. The following relation exists between the firm's newsprint output and total production costs:

Total Output (tons) Total Cost ($)
0 25
1 75
2 135
3 205
4 285
5 375
6 475
7 600

A. Construct a table showing Tinley's marginal cost of newsprint production.

B. What is the minimum price necessary for Tinley to supply 1 ton of newsprint?

C. How much newsprint would Tinley supply at industry prices of $75 and $100
Per ton?

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Solution Preview

Please refer attached file for better clarity of tables.

Solution:

A.Construct a table showing Tinley's marginal cost of newsprint production.

Total Output (tons) Total Cost ($) Marginal Cost ($)
0 25 -
1 75 50
2 ...

Solution Summary

Solution describes the steps in findind marginal cost of production for various production levels. It also describes the steps to find out the supplt that Tinely Paper can make for a given market price.

$2.19