Problems:
You are given the following data about two firms:
FIRM A
|
Quantity
|
0
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
Total revenue ($)
|
0
|
|
10
|
|
20
|
|
30
|
|
40
|
|
50
|
|
60
|
|
Average revenue ($)
|
0
|
|
10
|
|
10
|
|
10
|
|
10
|
|
10
|
|
10
|
|
Marginal revenue ($)
|
|
10
|
|
10
|
|
10
|
|
10
|
|
10
|
|
10
|
|
|
Total cost ($)
|
30
|
|
42
|
|
50
|
|
60
|
|
76
|
|
100
|
|
140
|
|
Marginal cost ($)
|
|
12
|
|
8
|
|
10
|
|
16
|
|
24
|
|
40
|
|
|
Average cost ($)
|
∞
|
|
42
|
|
25
|
|
20
|
|
19
|
|
20
|
|
23.3333333
|
FIRM B
|
Quantity
|
0
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
Total cost ($)
|
100
|
|
134
|
|
154
|
|
177
|
|
216
|
|
266
|
|
366
|
|
Average cost ($)
|
∞
|
|
134
|
|
77
|
|
59
|
|
54
|
|
53.2
|
|
61
|
|
Marginal cost ($)
|
|
34
|
|
20
|
|
23
|
|
39
|
|
50
|
|
100
|
|
|
Price ($)
|
140
|
|
130
|
|
120
|
|
110
|
|
100
|
|
90
|
|
80
|
|
Marginal revenue ($)
|
|
130
|
|
110
|
|
90
|
|
70
|
|
50
|
|
30
|
|
|
Total revenue ($)
|
0
|
|
130
|
|
240
|
|
330
|
|
400
|
|
450
|
|
480
|
(a) Complete the two tables above.
(b) Are these firms operating in the short or the long run? (1 mark) Firm A: short run / long run
Firm B: short run / long run
(c) Are these firms operating under perfect or imperfect competition? Firm A:perfect / imperfect
Firm B:perfect / imperfect
(d) What level of output will these firms produce in the short run?
Firm A:
Firm B:
(e) How would you describe their profit positions?
Firm A:
Firm B:
Additional Information:
The problem related to economics and it is discusses about two firms A and B which are operating in the same market and are rivals. Their costs and revenues are given. The level of output and profit margin has been determined.