Examlex

Solved

Suppose That a Perfectly Competitive Firm's AVC Curve Is Given

question 26

Essay

Suppose that a perfectly competitive firm's AVC curve is given by AVC = WQ, and its marginal cost curve is given by MC = 2WQ, where W is the wage rate.
a. Graph the firm's AVC and MC curves if W = 20.
b. How many units of output will the firm produce at a market price of $3,200?
c. Graph the firm's AVC and MC curves if the wage rate falls to $10.
d. How many units of output will the firm now produce at a market price of $3,200?


Definitions:

Causal Factor

An element or factor that brings about a change or results in a particular effect or outcome.

Necessary Condition

a prerequisite that must be met for a certain event or outcome to occur.

Sufficient Condition

A condition or set of conditions that will ensure the occurrence of a particular outcome.

Sufficient Condition

A condition or set of conditions that guarantees the occurrence or the truth of something else but is not always necessary for it to happen.

Related Questions