MC АТС AVC $21.00 $20.00> $19.50 MR = $15.00 $12.50 - 30 40 50 Output (Q) The optimal output for the firm shown in the diagram above is: 40 30 zero (the firm should shutdown). 50

The graph attached illustrates the Demand, Marginal Revenue, Marginal Costs, Average Total Costs and Average variable Cost curves for a firm in a perfectly competitive market. What is the Optimum level of the output for the firm and what is the maximum price the firm can charge? How do you know?  At this price and output combination does the firm make economic profit of economic loss? Explain your answer. Calculate the economic profit or loss? Show your calculations.

Answer Box:  -5,0,3,5,10,30,45,50, continue to produce, shut down, Other

Table Cost.EX2.2: Data for a Competitive Firm Marginal Marginal Output Cost Revenue (Q) (MC) (MR) 10 $3.00 $4.00 11 $3.50 $4.00 12 $4.00 $4.00 13 $4.50 $4.00 14 $5.00 $4.00 15 $5.50 $4.00 16 $6.00 $4.00 Refer to Table Cost.EX2.2. If the firm wishes to maximize profit, it should produce units. O 10 O 12 O 11 6.

16 5 Use the table below to answer questions about Christina's Christmas Wreaths. Christina operates in a perfectly competitive market for wreaths. Christina's Costs and Revenue Quantity Average Variable (wreaths) Cost (dollars) 5 $14.00 6 - 15.00 7 CALL/M 16.00 8 22.00 9 28.00 10 34.00 wreaths Average Total Cost (dollars) $24.00 23.00 23.00 28.00 34.00 39.00 $ Instructions: In part a, enter your answer as a whole number. In parts b and c, round your answers to two decimal places. a. What is the profit-maximizing level of output for Christina's Christmas Wreaths? Marginal Cost (dollars) $20.00 b. What is the profit per unit if the profit-maximizing level of output is produced? $ olo L c. What is the total economic profit generated by producing the profit-maximizing output? $ % Marginal Revenue (dollars) $63.00 63.00 63.00 63.00 63.00 63.00 22.00 23.00 BIEL 63.00 82.00 TAO 84.00

Consider a kettle firm A in a perfectly competitive market. Table 1 shows the quantity produced per hour (Q) and the total cost (TC) in the short run. Quantity 0 12345C70 2 6 8 Total cost 17 30 40 55 75 100 130 165 210 Fixed cost 17 17 17 17 17 17 17 17

constant SavedSaved Question 11 Question 12 Which graphs represents the long run equilibrium for a perfectly competitive firm? P P MC ATC D P MC D ATC 0 0 Quantity (A) Quantity MR MR (B) MC MC P ATC D=MR ATC D 0 Quantity (C) 0 Quantity MR (D) Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a A b B C C d D Question 13 Please review the graph below containing a d