3) What rule do economists follow to determine the quantity that should be produced in order to maximize profit?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Question 3 please
1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in the
long run in the market (In other words, will other firms join the market or exit the market?)
2) If ATC is above the MR=P=AR=D line is there a profit or a loss? What will happen in the
long run in the market (In other words, will other firms join the market or exit the market?)
3) What rule do economists follow to determine the quantity that should be produced in
order to maximize profit?
4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-run
and the long-run? (Explained at the end of the video).
5) If the profit maximizing quantity is 50, the average revenue (AR) is $6 and the average
total cost (ATC) is $5, what is the profit? (Reminder: profit = total revenue - total cost)
Transcribed Image Text:1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in the long run in the market (In other words, will other firms join the market or exit the market?) 2) If ATC is above the MR=P=AR=D line is there a profit or a loss? What will happen in the long run in the market (In other words, will other firms join the market or exit the market?) 3) What rule do economists follow to determine the quantity that should be produced in order to maximize profit? 4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-run and the long-run? (Explained at the end of the video). 5) If the profit maximizing quantity is 50, the average revenue (AR) is $6 and the average total cost (ATC) is $5, what is the profit? (Reminder: profit = total revenue - total cost)
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Cash Flow
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education