Consider a Competitive Industry and a Price-Taking Firm That Produces

Question 69
Multiple Choice

Consider a competitive industry and a price-taking firm that produces in that industry.The market demand and supply functions are estimated to be: Demand: img Supply: img where Q is quantity,P is the price of the product,M is income,and img is the input price.The manager of the perfectly competitive firm uses timeseries data to obtain the following forecasted values of M and img for 2021: img The manager also estimates the average variable cost function to be img Total fixed costs will be $2,000 in 2021.Average variable cost reaches its minimum value of _____ units of output. A)1,000 B)1,500 C)2,000 D)2,500