ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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4. Profit maximization in the cost-curve diagram
The following graph plots daily cost curves for a firm operating in the competitive market for rompers.
Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates.
PRICE (Dollars per romper)
50
45
40
媽笋
25
20
15
10
5
D
+
0
2
MC
AIC
AVC
4 6 8 10 12 14 16
QUANTITY (Thousands of rompers per day)
18
20
Profit or Loss
expand button
Transcribed Image Text:4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per romper) 50 45 40 媽笋 25 20 15 10 5 D + 0 2 MC AIC AVC 4 6 8 10 12 14 16 QUANTITY (Thousands of rompers per day) 18 20 Profit or Loss
In the short run, given a market price equal to $15 per romper, the firm should produce a daily quantity of
rompers.
On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of
$15 and the quantity of production from your previous answer.
Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss.
The rectangular area represents a short-run
of 5
thousand per day for the firm,
expand button
Transcribed Image Text:In the short run, given a market price equal to $15 per romper, the firm should produce a daily quantity of rompers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of 5 thousand per day for the firm,
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