Answer the Question on the Basis of the Following Cost

question 42

Multiple Choice

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: $\begin{array}{c}\begin{array}{c}\\\text {Total}\\\underline{\text {Product}}\\1 \\2 \\3 \\4 \\5 \\6 \\7 \\8 \\9 \\10 \\11 \\12\end{array}\begin{array}{c}\text {Average}\\\text {Fixed }\\\underline{\text {Cost }}\\\$ 100.00 \\50.00 \\33.33 \\25.00 \\20.00 \\16.67 \\14.29 \\12.50 \\11.11 \\10.00 \\9.09 \\8.33\end{array}\begin{array}{c}\text {Average}\\\text {Variable}\\\underline{\text {Cost}} \\\$ 17.00 \\16.00 \\15.00 \\14.25 \\14.00 \\14.00 \\15.71 \\17.50 \\19.44 \\21.60 \\24.00 \\26.67\end{array}\begin{array}{c}\text {Average}\\\text {Total}\\\underline{\text {Cost}}\\ \$ 117.00 \\66.00\\48.33\\39.25\\34.00\\30.67\\30.00\\30.00\\30.55\\31.60\\33.09\\35.00\end{array}\begin{array}{c}\text {Marginal}\\\underline{\text {Cost}}\\ \$ 17 \\15\\13\\12\\13\\14\\26 \\30\\30 \\35\\41\\48 \\56\end{array}\end{array}$
Refer to the data.If there were 1,000 identical firms in this industry and total or market demand is as shown below,equilibrium price will be: $$\begin{array}{l}\begin{array} { c c }Price& \text { Quantity Demanded }\\ \hline \$ 50 & 3,000 \\42 & 6,000 \\36 & 9,000 \\32 & 11,000 \\20 & 14,000 \\13 & 19,500\end{array}\end{array}$$

• A) $32.
• B) $42.
• C) $36.
• D) $20.

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Definitions:

Sole Proprietor

A business structure where a single individual owns, manages, and bears the responsibilities for all aspects of the business.

Limited Liability

A legal status where a person's financial responsibility is limited to a fixed amount, usually the value of their investment in a company or partnership.

Torts

Civil wrongdoings recognized by law as grounds for a lawsuit, resulting in injury or harm that constitutes the basis for a claim by the injured party.

Vicariously Liable

Legal responsibility of one party for the actions of another party, typically in an employer-employee relationship.