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Question: Assume that EasyComp, a computer company operating in a perfectly competitive market structure, produces affordable, easy-to-use home computer systems.

31 Oct 2022,7:00 PM

 

Assume that EasyComp, a computer company operating in a perfectly competitive market structure, produces affordable, easy-to-use home computer systems. EasyComp has fixed costs of $250. EasyComp’s marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. Please respond to the following questions below by drawing on the three criteria of the empirical and quantitative skills core objective.

 

 

 

  1. Please fill in the missing cost values in the table below by drawing on the above given

 

information and by rounding your calculations to the nearest whole number where you round numbers of 0.5 and above up and numbers of 0.49 and below down. (criteria: manipulation of numerical data or observable facts)

 

 

Q

TC (Total Cost)

ATC

(Average Total Cost)

TVC (Total variable

Cost)

AVC

(Average Variable Cost)

MC

(Marginal Cost)

0

250

 

 

 

 

1

950

950

700

700

700

2

1200

600

950

475

250

3

1500

500

1250

417

300

4

1850

463

1600

400

350

5

2250

450

2000

400

400

6

2700

450

2450

408

450

7

3200

457

2950

421

500

 

  1. Please state first at what price the break-even point would be and then briefly describe how you found the break-even point based on values above. (criteria: analysis of numerical data or observable facts)

 

 

  1. Please state first at what price the shutdown point would be and then briefly describe how you found the shutdown point based on the values above. (criteria: analysis of numerical data or observable facts)
  1. If EasyComp sells the computers for $500, please state whether EasyComp is making a profit or a loss? Next, please describe how large the profit or loss is and show your analysis. (criteria: analysis of numerical data or observable facts)
  2. Sketch a graph with MR, MC, and ATC curves to illustrate your answer and show the profit or loss. (criteria: manipulation of numerical data or observable facts)
  3. Would you advise EasyComp to stay in business or shut down the business based on the shown profit or loss? Please justify your conclusion! (criteria: informed conclusion)
  4. Based on the knowledge gained from the above analysis, what must any future computer

 

company that wants to enter this perfectly competitive market make sure it can do in order to be profitable? (criteria: informed conclusion)

  1. If the market structure were to change from perfect competition to monopolistic

 

competition, what would the now monopolistically competitive computer company EasyComp have to do in order to become more profitable compared to its peer computer companies? (criteria: informed conclusion)

Expert answer

 

 

Q

TC (Total Cost)

ATC

(Average Total Cost)

TVC (Total variable

Cost)

AVC

(Average Variable Cost)

MC

(Marginal Cost)

 

 

Q

TC (Total Cost)

ATC

(Average Total Cost)

TVC (Total variable

Cost)

AVC

(Average Variable Cost)

MC

(Marginal Cost)

0

250

 

 

 

 

1

950

950

700

700

700

2

1200

600

950

475

250

3

1500

500

1250

417

300

4

1850

463

1600

400

350

5

2250

450

2000

400

400

6

2700

450

2450

408

450

7

3200

457

2950

421

500

 

Please write up your answers to the below presented assignment questions in a minimum of 2 pages and a maximum of 4 pages including any potential references Please rewrite the

assignments questions before your answers. Please make sure you follow the instructions and respond fully to the questions so that you have good coverage of each of the three core objectives in your paper. Please format the writing part of your paper double spaced, size 12 type, Times-Roman font, with 1-inch margins at the top, sides, and bottom of each page. Please do not add a cover page. Your name, your Collin College CWID number, and your

ECON-2302.909 course section number should be centered at the top of your first page.

 

 

Assume that EasyComp, a computer company operating in a perfectly competitive market

 

structure, produces affordable, easy-to-use home computer systems. EasyComp has fixed costs of $250. EasyComp’s marginal cost of producing computers is $700 for the first computer,

$250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the

sixth, and $500 for the seventh. Please respond to the following questions below by drawing on the three criteria of the empirical and quantitative skills core objective.

Please write up your answers to the below presented assignment questions in a minimum of 2 pages and a maximum of 4 pages including any potential references Please rewrite the

assignments questions before your answers. Please make sure you follow the instructions and respond fully to the questions so that you have good coverage of each of the three core objectives in your paper. Please format the writing part of your paper double spaced, size 12 type, Times-Roman font, with 1-inch margins at the top, sides, and bottom of each page. Please do not add a cover page. Your name, your Collin College CWID number, and your

ECON-2302.909 course section number should be centered at the top of your first page.

 

 

Assume that EasyComp, a computer company operating in a perfectly competitive market

 

structure, produces affordable, easy-to-use home computer systems. EasyComp has fixed costs of $250. EasyComp’s marginal cost of producing computers is $700 for the first computer,

$250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the

 

sixth, and $500 for the seventh. Please respond to the following questions below by drawing on the three criteria of the empirical and quantitative skills core objective.

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