The graph illustrates the demand for a sausage offered by a monopoly firm, depicted with cost curves and a marginal revenue (MR) curve. The firm aims to find the profit-maximizing quantity of sausage to produce.### Key Graph Components:- **Axes:** - The vertical axis represents the price in dollars per kilogram ($/kg). - The horizontal axis represents the quantity in kilograms (Q kg).- **Curves:** - **Demand Curve (D):** This downward-sloping line shows the relationship between price and quantity demanded. - **Marginal Revenue Curve (MR):** Positioned below the demand curve, showing the additional revenue gained by selling an extra unit. - **Marginal Cost Curve (MC):** A horizontal line, representing the constant cost of producing an additional unit. - **Average Total Cost Curve (ATC):** A U-shaped curve showing the average cost per unit at different production levels.### Analysis:In a monopoly, the profit-maximizing quantity is found where the Marginal Cost (MC) curve intersects with the Marginal Revenue (MR) curve. Based on this graph, the intersection occurs at a quantity (Q) of 8 kg. This is the output level where the firm will maximize its profit, as it is where the cost of producing an additional unit equals the revenue it generates.### Answer:Q = 8

Here, it the given graph shows the cost, revenue and demand function of a firm that is the only…

23. The graph below depicts the demand for a sausage. This is the only company that sells this produ so it is a price maker with the MR depicted. What is the profit maximizing quantity for the firm to produce? (The firm can't shut down or exit so don't consider that as an option.) 45 T ($/kg) 40 35 30 25 20 АТС 15 10 + MC 5 MR D 4 6 8 10 12 14 16 18 20 Q (kg) Q = 2.

23. The graph below depicts the demand for a sausage. This is the only company that sells this produ so it is a price maker with the MR depicted. What is the profit maximizing quantity for the firm to produce? (The firm can't shut down or exit so don't consider that as an option.) 45 T ($/kg) 40 35 30 25 20 АТС 15 10 + MC 5 MR D 4 6 8 10 12 14 16 18 20 Q (kg) Q = 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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