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 88 80 70 60 50 40 ATC 88 30 20 AVC MC 10 10 0 0 10 20 30 40 50 60 70 80 90 100 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 88 80 70 60 50 40 ATC 88 30 20 AVC MC 10 10 0 0 10 20 30 40 50 60 70 80 90 100 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)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 3PA
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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
88
80
70
60
50
40
ATC
88
30
20
AVC
MC
10
10
0
0
10 20
30 40
50
60 70 80
90 100
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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