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3. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for motor scooters. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per scooter) 100 90 80 228 22 50 40 ATC 20 MC AVC 10 0 88 50 60 70 80 90 100 0 10 20 30 40 QUANTITY (Thousands of scooters per day) Profit or Loss ? In the short run, given a market price equal to $45 per scooter, the firm should produce a daily quantity of 30,000 scooters. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run profit of $150 thousand per day for the firm.

3. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for motor scooters. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per scooter) 100 90 80 228 22 50 40 ATC 20 MC AVC 10 0 88 50 60 70 80 90 100 0 10 20 30 40 QUANTITY (Thousands of scooters per day) Profit or Loss ? In the short run, given a market price equal to $45 per scooter, the firm should produce a daily quantity of 30,000 scooters. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run profit of $150 thousand per day for the firm.

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 9PA
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3. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for motor scooters. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per scooter) 100 90 80 228 22 50 40 ATC 20 MC AVC 10 0 88 50 60 70 80 90 100 0 10 20 30 40 QUANTITY (Thousands of scooters per day) Profit or Loss ? In the short run, given a market price equal to $45 per scooter, the firm should produce a daily quantity of 30,000 scooters. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run profit of $150 thousand per day for the firm.
Transcribed Image Text:3. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for motor scooters. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. PRICE (Dollars per scooter) 100 90 80 228 22 50 40 ATC 20 MC AVC 10 0 88 50 60 70 80 90 100 0 10 20 30 40 QUANTITY (Thousands of scooters per day) Profit or Loss ? In the short run, given a market price equal to $45 per scooter, the firm should produce a daily quantity of 30,000 scooters. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $45 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run profit of $150 thousand per day for the firm.
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