a. Yes, the firm will produce in the short run when the price is $68.00..
b. The profit-maximizing output for the firm is 20 units.
c) The economic profit or loss per unit of output will vary depending on the price of the product.
d) The short-run supply schedule for the firm is shown in the table above.
e) The industry supply schedule is shown in the table above.
f) The equilibrium price is $48.00.
g) The equilibrium output for the industry is 26,000 units.
h) For each firm, the equilibrium output is 13 units.
i) The profit or loss per unit at the equilibrium price is $5.33.
j) The profit or loss per firm is $69.33 at the equilibrium price.
k) The industry will expand in the long run.
Output Total Revenue (TR) Total Cost (TC) Profit/Loss (TR - TC)
0 0 36 -36
2 136 72 64
4 272 90 182
6 408 114 294
8 544 144 400
10 680 180 500
12 816 222 594
14 952 264 688
16 1088 312 776
18 1224 366 858
20 1360 426 934
22 1496 492 1004
Output Quantity Supplied (QS) by Each Firm Total Quantity Supplied (QS) by Industry
$68 20 30,000
$43 14 21,000
$34 0 0
Price Quantity Demanded (QD)
$64 22,000
$56 24,000
$48 26,000
$40 28,000
$32 30,000
Price Quantity Supplied (QS) Equilibrium Quantity
$48 26,000 26,000
Output Profit/Loss per Unit Profit/Loss per Firm
20 $46.70 $934
a) Will this firm produce in the short run?
Yes, the firm will produce in the short run when the price is $68.00. At this price, the firm's total revenue is greater than its total cost, resulting in a profit of $934 per firm.
b) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output?
The profit-maximizing output for the firm is 20 units. At this output, the firm's profit per unit is maximized at $46.70.
c) What economic profit or loss will the firm realize per unit of output?
The economic profit or loss per unit of output will vary depending on the price of the product. At the equilibrium price of $48.00, the firm will make a profit of $5.33 per unit.
d) Complete the short-run supply schedule for the firm.
The short-run supply schedule for the firm is shown in the table above.
e) Complete the industry supply schedule.
The industry supply schedule is shown in the table above.
f) What will be the equilibrium price?
The equilibrium price is $48.00. At this price, the quantity demanded equals the quantity supplied.
g) What will be the equilibrium output for the industry?
The equilibrium output for the industry is 26,000 units.
h) For each firm?
For each firm, the equilibrium output is 13 units.
i) Profit or loss per unit?
The profit or loss per unit at the equilibrium price is $5.33.
j) What will profit or loss be per firm?
The profit or loss per firm is $69.33 at the equilibrium price.
k) Will this industry expand or contract in the long run?
The industry will expand in the long run. This is because the equilibrium price is above the minimum average total cost for each firm. This means that firms are making a profit at the equilibrium price, and this will attract new firms to enter the industry.