Suppose the industry for physicians providing flu vaccinations is perfectly competitive, and all companies have production functions and cost functions that are identical and illustrated by the production process in the table below.
- What are the three primary characteristics of a perfectly competitive market?
- Large number of firms, homogeneous product, free entry and exit
- Determine the total cost (TC), total fixed cost (TFC), total variable cost (TVC), average total cost (ATC), average fixed cost (AFC), average variable cost (AVC), and the marginal cost (MC) of cleaning offices in the table.
- Graph the ATC, AFC, AVC, and MC curves.