Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10 Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250 Answer the following questions: 1. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? 2. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? 3. Comment on your answers to parts (1) and (2).
Apex is a perfectly competitive firm. It has total fixed costs of $300/day and a daily variable cost schedule in the table below. Apex’s product sells for $200 per unit. Quantity (units) 0 1 2 3 4 5 6 7 8 9 10 Total Variable Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250 Answer the following questions: 1. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? 2. If the market price dropped further to $40, what is the profit-maximizing level of output? What is Apex’s profit (or loss) in this case? 3. Comment on your answers to parts (1) and (2).
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 11E
Related questions
Question
Apex is a
schedule in the table below. Apex’s product sells for $200 per unit.
Quantity (units) 0 1 2 3 4 5 6 7 8 9 10
Total Variable
Cost (TVC) 0 100 180 220 300 390 500 640 800 1000 1250
Answer the following questions:
1. If the market price dropped to $80, what is the profit-maximizing level of output? What is Apex’s
profit (or loss) in this case?
2. If the market price dropped further to $40, what is the profit-maximizing level of output? What
is Apex’s profit (or loss) in this case?
3. Comment on your answers to parts (1) and (2).
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