Perfect Competition and the Supply Curve

Jun 17th, 2015
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Grand Canyon University
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Joe Brown’s dairy operates in a perfectly competitive marketplace. Joe’s machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages paid to the few workers he employs at the dairy and the grain he feeds to his dairy cows.

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Unit 7 Assignment: Perfect Competition and the Supply CurveName: -Course Number:-Section Number:-Unit Number:- 7Date:- Problem 1Joe Brown's dairy operates in a perfectly competitive marketplace. Joe's machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages paid to the few workers he employs at the dairy and the grain he feeds to his dairy cows. The variable cost associated with each level of output is given in the accompanying table.Gallons of Milk Variable Cost0 - 1000 $ 2,100 2000 $ 2,200 3000 $ 2,900 4000 $ 3,680 5000 $ 5,180 a. Calculate the total cost, the marginal cost per unit, the average variable cost, and the average total cost, for each quantity of output. Gallonsof MilkFCVCTCMCAVCATC0$500-$ 500---1000500 $ 2,100 2,600$2.10$2.100$2.6002000500 $ 2,200 2,7000.101.1001.3503000500 $ 2,9003,4000.700.9701.1334000500 $ 3,680 4,1800.780.9201.0455000500 $ 5,180 5,6801.501.0361.136b. What is the break-even price? The break even point of a compa

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