The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is$7.50, a profit-maximizing firm would:Price and cost1615141312111098765432102MCyAA1Ba101112ATC AVC13QuantityProduce between 10 and 11, for a positive economic profitProduce about 9, for an economic profit of over $9Produce between 10 and 11, for an economic profit of about $0Produce about 9, for an economic profit of less than $9Produce about 10, for an economic profit of about $20

A perfectly competitive market structure is one in which there are large no of buyers and sellers.…

Answered: The cost curves below are for a firm…

The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is $7.50, a profit-maximizing firm would:

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 14CQ

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Question

The cost curves below are for a firm competing in a perfectly competitive industry. If the market price is
$7.50, a profit-maximizing firm would:
Price and cost
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
2
MC
y
A
A
1
B
a
10
11
12
ATC AVC
13
Quantity
Produce between 10 and 11, for a positive economic profit
Produce about 9, for an economic profit of over $9
Produce between 10 and 11, for an economic profit of about $0
Produce about 9, for an economic profit of less than $9
Produce about 10, for an economic profit of about $20

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