Determine profit maximizing level of output

Assignment Help Macroeconomics

Reference no: EM1370039

1- Which of the following conditions descriptive a perfectly competitive market?
- Many barriers to entry
- Firms are price takers
-The number of firms is large
- Firms' products are differentiated
- There is complete information
- Firms are profit maximizers

2- Graph marginal costs from the table below and answer the following questions:

OUTPUT MARGINAL COSTS
1 15
2 12
3 20
4 27
5 34
6 40
7 47
a) The firm can sell a helmet for $34 and the firm is producing 6 helmets. Is it maximizing profit ? Why or why not?

b) The firm can sell a helmet for $34 and the firm is producing 4 helmets. Is it maximizing profit ? Why or why not?

c) The firm can sell a helmet for $34 . What is the profit- maximizing level of output?

3- Why doesn't a perfectly competitive firm yield economic profit in the long-run?

Reference no: EM1370039

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