Answered: 220 MC 200- 180- 160- 140- 120- 100- 80…

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

The horizontal axis labeled quantity ranges from 0 to 26 in increments of 2. The vertical axis labeled dollar ranges from 0 to 220 in increments of 20. A line labeled M R begins at the point (0, 200) goes down to the right and ends at the point (10, 0). A second line labeled D begins at the point (0, 200) goes down to the right and ends at the point (20, 0). An upward-facing curve labeled M C begins at the point (3, 85) goes down to the right with decreasing steepness to a low point at (7, 60) then goes up to the right with increasing steepness to end at the point (18, 200). A second upward-facing curve labeled A T C begins at the point (4, 150) goes down to the right with decreasing steepness to a low point at (12, 85) then goes up to the right with increasing steepness to end at the point (21, 160). The curve M C intersects the line M R at (7, 60), the line D at (12, 85) and the curve A T C at (12, 85). All values are approximated."

a. What is the firm’s optimal output?

units

b. What is the firm’s optimal price?

c. What are the firm’s maximum profits?

d. What adjustments should the manager be anticipating?

multiple choice