A new production technology for amking vitamins is invneted by a college professor who decides not to patent it. Thus, it is available for anybody to copy and put into use. Teh TC per bottle for production up to 100,000 bottles per day is given in the following table.
output TC
25,000 50,000
50,000 70,000
75,000 75,000
100,000 80,000
a. what i the ATC for each level of output listed in the table?
b. Suppose that for each 25,000-bottle-per-day increase in production above 100,000 bottles per day, TC increases by 5,000. Is this a decreasing-cost industry?
c. Suppose that the price of a bottle of vitamins is $1.33 and that at that price the total quantity demanded by consumers is75,000,000 bottles. How many firms will there be in this industry?
d. Suppose that, Instead, the market quantity demanded at a price of $1.33 is only 75,000. How many firms do you expect there to be in this industry?
e. Review your answers to parts b,c and d. Does the level of demand determine this industry's market structure?
f. Compare your anwer to part d of this problem with your answer to part d of problem 3. Do both production