lon 6 of 20 The graph shows the demand curve (D), average total cost curve (ATC), average variable cost curve (AVC), and the 90 marginal cost curve (MC) for a perfectly (or purely) competitive firm. 80 D= MR Assuming that this firm maximizes profit, what is this firm's 70 profit? 60 АТС 50 AVC 40 profit: $ 30. MC 20 10 - 10 20 30 40 50 60 70 80 90 Quantity Price and cost ($) 8-

lon 6 of 20 The graph shows the demand curve (D), average total cost curve (ATC), average variable cost curve (AVC), and the 90 marginal cost curve (MC) for a perfectly (or purely) competitive firm. 80 D= MR Assuming that this firm maximizes profit, what is this firm's 70 profit? 60 АТС 50 AVC 40 profit: $ 30. MC 20 10 - 10 20 30 40 50 60 70 80 90 Quantity Price and cost ($) 8-

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter8: Output, Price, And Profit: The Importance Of Marginal Analysis

Section: Chapter Questions

Problem 5TY

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Similar questions

A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
What two lines on a cost curve diagram intersect at the zero-profit point?
What is a price taker firm?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
Explain in words why a profit-maximizing film will not choose to produce at a quantity where marginal cost exceeds marginal revenue.
How does the average variable cost curve help a firm know whether it should shut down immediately?
What prevents a perfectly competitive firm from seeking higher profits by increasing the price that it charges?
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
How does a perfectly competitive firm decide what price to charge?
How does the average cost curve help to show whether a firm is making profits or losses?