Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. The following graph plots daily cost curves for a firm operating in the competitive market for jumpsuits.PRICE (Dollars per jumpsuit)5045403530252015105002MC□4ATCAVC+68 10 1214QUANTITY (Thousands of jumpsuits)+161820? Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph todetermine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferentbetween producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact averagevariable cost information.)Price(Dollars per jumpsuit)12.5027.5045.00Quantity(Jumpsuits)Total Revenue(Dollars)Fixed Cost Variable Cost(Dollars)(Dollars)135,000135,000135,000Profit(Dollars)If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $135,000 per day. In other words, if itshuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease).This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-isper jumpsuit.

A perfectly competitive firm is a price taker, which means it takes the price set by the market…

The following graph plots daily cost curves for a firm operating in the competitive market for jumpsuits. PRICE (Dollars per jumpsuit) 50 45 40 35 30 25 20 15 10 5 0 + 02 MC 4 ATC AVC 6 8 10 12 14 QUANTITY (Thousands of jumpsuits) 16 18 20 ?

The following graph plots daily cost curves for a firm operating in the competitive market for jumpsuits. PRICE (Dollars per jumpsuit) 50 45 40 35 30 25 20 15 10 5 0 + 02 MC 4 ATC AVC 6 8 10 12 14 QUANTITY (Thousands of jumpsuits) 16 18 20 ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

The following graph plots daily cost curves for a firm operating in the competitive market for jumpsuits.
PRICE (Dollars per jumpsuit)
50
45
40
35
30
25
20
15
10
5
0
0
2
MC
□
4
ATC
AVC
+
6
8 10 12
14
QUANTITY (Thousands of jumpsuits)
+
16
18
20
?

Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to
determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent
between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average
variable cost information.)
Price
(Dollars per jumpsuit)
12.50
27.50
45.00
Quantity
(Jumpsuits)
Total Revenue
(Dollars)
Fixed Cost Variable Cost
(Dollars)
(Dollars)
135,000
135,000
135,000
Profit
(Dollars)
If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $135,000 per day. In other words, if it
shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease).
This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-is
per jumpsuit.

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Step 1: Define perfect competition

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Step 2: Calculation of profit at price of $12.50

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Step 3: Calculation of profit at a price of $27.50

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Step 4: Calculation of profit at a price of $45

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Step 5: Shutdown price.

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