Updated Chapter

1. Problems and Applications Q11

What is each firm’s fixed cost? $50

What is its variable cost? 

equation for average total cost? 

Data table:

q	MC	ATC
5	5	12.5
6	6	11.33
7	7	10.64
8	8	10.25
9	9	10.06
10	10	10
11	11	10.05
12	12	10.17
13	13	10.35
14	14	10.57
15	15	10.83

Minimum Average total cost is when q = 10

Each firm's supply curve is its MC. Supply curve function is: q

in the long run, the firm will remain in the market and produce if q≥10

In the short run, in which the number of firms is fixed, the equilibrium price is $12 and the total quantity produced in the market is 108 units. Each firm produces 12 units

in this equilibrium each firm makes a profit of $22

Firms have an incentive to enter the market

in the long run, with free entry and exit, the equilibrium price is $10, and the total quantity produced in the market is 110 units. There are 11 firms in the market each firm producing 10 units