1-Use the graph to answer the questions. Typical Computer Firm Price or Cost (dollars per computer) $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 MC ATC 100 200 300 400 500 600 700 800 9001,000 Quantity (computers per month) $[Select] Please choose the correct responses from the choices given. If the market price of computers is $800: a. What is the profit-maximizing quantity? computers per month b. Calculate the profits (or losses) for this typical firm.

1-Use the graph to answer the questions. Typical Computer Firm Price or Cost (dollars per computer) $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 MC ATC 100 200 300 400 500 600 700 800 9001,000 Quantity (computers per month) $[Select] Please choose the correct responses from the choices given. If the market price of computers is $800: a. What is the profit-maximizing quantity? computers per month b. Calculate the profits (or losses) for this typical firm.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?

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TOTAL COST AND REVENUE (Dollars) 100 Total Cost ם Total Revenue 75 50 -25 A 50 0 1 2 5 QUANTITY (Shirts) A A Profit Calculate Neha's marginal revenue and marginal cost for the first seven shirts she produces and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. (?) COSTS AND REVENUE (Dollars per shirt) 30 25 225 20 15 10 о OO 2 3 A 5 6 QUANTITY (Shirts) Marginal Revenue + Marginal Cost Neha's profit is maximized when she produces 10 shirts. When she does this, the marginal cost of the previous shirt she produces is $ which is than the price Neha receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is S than the price Neha receives for each shirt she sells. Therefore, Neha's profit- maximizing quantity corresponds to the intersection of the which is curves. Because Neha is a price taker, this…
00 CO T 2. 75 50 TOTAL COST AND REVENUE (Dollars) 3. Profit maximization using total cost and total revenue curves Suppose Susan runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Susan's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Susan produces. 00. 175 Total Revenue 150 Total Cost 125 Profit 25 -25 4 9. QUANTITY (Frying pans) 8 3. 5. 7. MacBook Pro -CHEF- 23 2$ 4. M K H M X
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The following figure shows the total cost and total revenue for a firm when it prices its products at $8 and $10. Price 0 1. OA 2. OC 3. OF 4. OG H F E JG TC TRO (P=$10) TR1 (P=$8) Output At a price of $10, the profit maximizing level of output for the firm is