The market for smoothies is perfectly competitive . 1 answer below »

The market for smoothies is perfectly competitive .The following table sets out the market demand schedule.

 

 

Price

Quantity demanded

(dollars per smoothie)

(smoothies per hour)

1.90

1,000

2.00

950

2.20

800

2.91

700

4.25

550

5.25

400

5.50

300

Each of the 100 producers of smoothies has the following costs when it uses its least-cost plant:

Output

Marginal cost

Average

Average

smoothies

dollars per

variable cost

total cost

per hour)

additional smoothie)

(dollars per

smoothie)

3

2.5

4

7.33

4

2.2

3.53

6.03

5

1.9

3.24

5.24

6

2

3

4.67

7

2.91

2.91

4.34

8

4.25

3

4.25

9

8

3.33

4.44

a. What is the market price of a smoothie?

b. What is the market quantity of smoothies?

c. How many smoothies does each firm sell?

d. What is the economic profit made or economic loss incurred by each firm?

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