4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 40 36 Profit or Loss 32 28 24 20 ATC 16 12 AVC MC 8 10 12 14 16 18 20 QUANTITY (Thousands of candles) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area of this rectangle indicates that the firm's would be S per day. PRICE (Dollars per candle)

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4. Profit maximization in the cost-curve diagram
Suppose that the market for candles is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this
market.
40
36
Profit or Loss
32
28
24
20
ATC
16
12
AVC
MC
4
8
10
12
14
16
18
20
QUANTITY (Thousands of candles)
In the short run, at a market price of $20 per candle, this firm will choose to produce
candles per day.
On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and
the firm chooses to produce the quantity you already selected.
Note: In the following question, you should enter a positive number in the numeric entry field.
The area of this rectangle indicates that the firm's
would be S
per day.
PRICE (Dollars per candle)
Transcribed Image Text:4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 40 36 Profit or Loss 32 28 24 20 ATC 16 12 AVC MC 4 8 10 12 14 16 18 20 QUANTITY (Thousands of candles) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area of this rectangle indicates that the firm's would be S per day. PRICE (Dollars per candle)
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