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22. Suppose the firm in the figure below sets a uniform price for its product. Please show the steps.  a. If the firm chooses to set a uniform price for its product, then the profit-maximizing price is $________ and ________ units will be sold. Under this uniform pricing policy, the maximum possible profit is $________. b. The maximum profit the firm could earn if the firm sells 2,000 units and is able to charge the demand price for every one of the 2,000 units it sells is $ ________. c. For the additional number of units sold by expanding output to 2,000 units (from the output level in part a), the consumer surplus that could be captured if it were possible to charge the demand price on every one of those units would amount to $________.

22. Suppose the firm in the figure below sets a uniform price for its product. Please show the steps.  a. If the firm chooses to set a uniform price for its product, then the profit-maximizing price is $________ and ________ units will be sold. Under this uniform pricing policy, the maximum possible profit is $________. b. The maximum profit the firm could earn if the firm sells 2,000 units and is able to charge the demand price for every one of the 2,000 units it sells is $ ________. c. For the additional number of units sold by expanding output to 2,000 units (from the output level in part a), the consumer surplus that could be captured if it were possible to charge the demand price on every one of those units would amount to $________.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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22. Suppose the firm in the figure below sets a uniform price for its product. Please show the steps. 

a. If the firm chooses to set a uniform price for its product, then the profit-maximizing price

is $________ and ________ units will be sold. Under this uniform pricing policy, the

maximum possible profit is $________.

b. The maximum profit the firm could earn if the firm sells 2,000 units and is able to charge

the demand price for every one of the 2,000 units it sells is $ ________.

c. For the additional number of units sold by expanding output to 2,000 units (from the

output level in part a), the consumer surplus that could be captured if it were possible to

charge the demand price on every one of those units would amount to $________.

The image is a graph representing the relationship between price, cost, and quantity in an economic context, likely illustrating concepts from microeconomics. - **Axes**: - The vertical axis represents "Price and cost (dollars)" ranging from $0 to $60. - The horizontal axis represents "Quantity," ranging from 0 to 4,000. - **Lines**: - **Demand Curve (D)**: A downward sloping line that begins at the top of the price axis at $60 and decreases to the right until it intersects the quantity axis at 4,000 units. This line represents the demand curve, indicating the inverse relationship between price and quantity demanded. - **Marginal Revenue Curve (MR)**: Another downward sloping line, starting from the price axis at a similar point as the demand curve but falling more steeply. It intersects the quantity axis before reaching 2,000 units. This line represents the marginal revenue, which is typically lower than the demand price for each additional unit sold. - **Marginal Cost equals Average Cost Line (MC = AC)**: A horizontal line at the $30 price level, indicating the point where marginal cost equals average cost. - **Intersection Points**: - The demand and MR curves diverge with increasing quantity. - The horizontal MC = AC line intersects the demand curve towards the middle, around 2,000 units, marking equilibrium or a break-even point in this context. This graph is likely used to illustrate pricing strategy, equilibrium concepts, or cost structures within a market.
Transcribed Image Text:The image is a graph representing the relationship between price, cost, and quantity in an economic context, likely illustrating concepts from microeconomics. - **Axes**: - The vertical axis represents "Price and cost (dollars)" ranging from $0 to $60. - The horizontal axis represents "Quantity," ranging from 0 to 4,000. - **Lines**: - **Demand Curve (D)**: A downward sloping line that begins at the top of the price axis at $60 and decreases to the right until it intersects the quantity axis at 4,000 units. This line represents the demand curve, indicating the inverse relationship between price and quantity demanded. - **Marginal Revenue Curve (MR)**: Another downward sloping line, starting from the price axis at a similar point as the demand curve but falling more steeply. It intersects the quantity axis before reaching 2,000 units. This line represents the marginal revenue, which is typically lower than the demand price for each additional unit sold. - **Marginal Cost equals Average Cost Line (MC = AC)**: A horizontal line at the $30 price level, indicating the point where marginal cost equals average cost. - **Intersection Points**: - The demand and MR curves diverge with increasing quantity. - The horizontal MC = AC line intersects the demand curve towards the middle, around 2,000 units, marking equilibrium or a break-even point in this context. This graph is likely used to illustrate pricing strategy, equilibrium concepts, or cost structures within a market.
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