Answer:
Yes; $17.50; $23.75
Explanation:
A purely competitive firm finds that the market price for its product is $25.00.
It has a fixed cost of $100.00 and a variable cost of $17.50 per unit for the first 50 units and then $30.00 per unit for all successive units.
The price for the first 50 units is $25 while the AVC is $17.50. So, yes, the price exceeds the AVC for the first 50 units.
The AVC for the first 50 units is $17.5 as mentioned in the question.
The Total variable cost for the first 100 units
= [tex]50\ \times\ 17.5\ +\ 50\ \times\ 30[/tex]
= $875 + $1500
= $2,375
The average variable cost for first 100 units
= [tex]\frac{TVC}{Q}[/tex]
= [tex]\frac{2,375}{100}[/tex]
= $23.75
