Suppose That Each Firm in an Industry Has Total Costs

question 54

Essay

Suppose that each firm in an industry has total costs as shown in the following table. $$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Quantity of } \\\text { Output }\end{array} & \begin{array} { c } \text { Total Costs } \\\text { (dollars) }\end{array} \\\hline 1 & 100 \\\hline 2 & 102 \\\hline 3 & 105 \\\hline 4 & 110 \\\hline 5 & 118 \\\hline 6 & 128 \\\hline 7 & 140 \\\hline 8 & 155 \\\hline\end{array}$$ (A) Suppose that the quuantity demanted in the market is perfectly inelastic at a quiantity af 6. Calculate the average tatal cost for each firm when there are 1, 2, and 6 firms in the inciustry. Draw a diagran incicating the relationship between average tatal cost and the number of Eirms.
(B) Suppose the quentity demended in the market exgands because of an opening of trade and is now perfectly inelastic ata quantity of a. Draw a diagram sirilar to the ane in part $( A )$ , inflicating the relationship between average total cost and the number of firms Why does this apering of tade cause this shift in the curve?
(C) What happens to price in the long run? Eogulain.

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Definitions:

Foreseeable Plaintiff

A person who is reasonably expected to be affected by a defendant's actions, thus entitled to protection under the duty of care in negligence law.

Duty of Care

A legal obligation imposed on individuals or organizations to adhere to a standard of reasonable care while performing any acts that could foreseeably harm others.

Raw Material

Basic material from which products are made, typically processed in manufacturing or used in the creation of goods.

Dangerous

Dangerous refers to anything that can potentially cause harm or pose a significant threat to health, safety, or well-being.