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4. The Theory of the Firm under Perfect Competition
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Q22 of 27 Page 66

Consider a market with two firms. The following table shows the supply schedules of the two firms: the SS1 column gives the supply schedule of firm 1 and the SS2 column gives the supply schedule of firm 2. Compute the market supply schedule.











































Price (Rs)



SS1 (kg)



SS2 (kg)



0



0



0



1



0



0



2



0



0



3



1



1



4



2



2



5



3



3



6



4



4




















































Price (Rs)



SS1 (kg)



SS2 (kg)



Market Supply


= SS1 + SS2



0



0



0



0



1



0



0



0



2



0



0



0



3



1



1



2



4



2



2



4



5



3



3



6



6



4



4



8




More from this chapter

All 27 →
20

The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good.

























































Quantity Sold



TR (Rs)



TC (Rs)



Profit



0



0



5




1



5



7




2



10



10




3



15



12




4



20



15




5



25



23




6



30



33




7



35



40



21

The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.



















































Output



TC (Rs)



0



5



1



15



2



22



3



27



4



31



5



38



6



49



7



63



8



81



9



101



10



123


23

Consider a market with two firms. In the following table, columns labelled as SS1 and SS2 give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.





















































Price (Rs)



SS1 (kg)



SS2 (kg)



0



0



0



1



0



0



2



0



0



3



1



0



4



2



0.5



5



3



1



6



4



1.5



7



5



2



8



6



2.5


24

There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.











































Price (Rs)



SS1 (units)



0



0



1



0



2



2



3



4



4



6



5



8



6



10



7



12



8



14


Questions · 27
4. The Theory of the Firm under Perfect Competition
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