A that price find the firms profit or loss will firm

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Consider a firm in a perfectly competitive industry. The firm has just built a plant that cost $25,000. Each unit of output requires $5 worth of materials. Each worker costs $5 per hour.

a. Based on the information above.

Where;             TFC is total fixed cost

                        TVC is total variable cost

                        TC is total cost

                        MC is marginal cost

                        AVC is average variable cost

                        ATC is average total cost.

b.  If the market price is $10, how many units of output will the firm produce?

c. At that price, what is the firm's profit or loss? Will the firm continue to produce in short-run? Carefully explain your answer.

d. Graph your results.

Reference no: EM13451817

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