The firm will maximize its profit at a quantity of After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ units. in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is $ How will the situation change over time? per unit for this output. Losses will induce firms to leave this market until the profit maximizing price falls to zero. Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. This market is already in long-run equilibrium, and will not change throughout time. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity.
The firm will maximize its profit at a quantity of After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ units. in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is $ How will the situation change over time? per unit for this output. Losses will induce firms to leave this market until the profit maximizing price falls to zero. Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. This market is already in long-run equilibrium, and will not change throughout time. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity.
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.1P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning