ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Price, marginal cost (5)
The diagram illustrates isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Which statement incorrectly describes the
diagram?
10,000
9.000
Profit- QP-A
000
CR, 25000
2,000
Margnal cost
6000
hoprofit curve $150.000
Ioprot curve S.000
5.00
4.000-
Ze om ttare (ACi)
3,000
140, 3300)
2.000
1000
10 20 30 40 50 60 70 80 90 100 110 120
Quantity of cars, Q
Select one:
O a. If MQ Motors sells 35 cars, it would make profits of $6,000,
O b. The average cost decreases until Q-40 and then increases.
Oc. The shape of MQ Motors' cost function affects the shape of their isoprofit curves,
O d. if MO Motors sets the price equal to the average cost, it makes zero economic profit.
Oe. Given the same quantity of cars, MQ Motors' profits increase as price increases.
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Transcribed Image Text:Price, marginal cost (5) The diagram illustrates isoprofit curves and the marginal cost curve of MQ2020, a luxury car manufactured by MQ Motors. Which statement incorrectly describes the diagram? 10,000 9.000 Profit- QP-A 000 CR, 25000 2,000 Margnal cost 6000 hoprofit curve $150.000 Ioprot curve S.000 5.00 4.000- Ze om ttare (ACi) 3,000 140, 3300) 2.000 1000 10 20 30 40 50 60 70 80 90 100 110 120 Quantity of cars, Q Select one: O a. If MQ Motors sells 35 cars, it would make profits of $6,000, O b. The average cost decreases until Q-40 and then increases. Oc. The shape of MQ Motors' cost function affects the shape of their isoprofit curves, O d. if MO Motors sets the price equal to the average cost, it makes zero economic profit. Oe. Given the same quantity of cars, MQ Motors' profits increase as price increases.
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