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4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for running shorts. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 40 40 36 32 28 20 24 20 20 PRICE (Dollars per short) 160 12 ATC AVC 8 MC 4 Profit or Loss 0 0 2 4 6 8 10 12 14 16 18 20 20 QUANTITY (Thousands of shorts per day) In the short run, given a market price equal to $20 per short, the firm should produce a daily quantity of shorts. 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 $20 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 of $ thousand per day for the firm.

4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for running shorts. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 40 40 36 32 28 20 24 20 20 PRICE (Dollars per short) 160 12 ATC AVC 8 MC 4 Profit or Loss 0 0 2 4 6 8 10 12 14 16 18 20 20 QUANTITY (Thousands of shorts per day) In the short run, given a market price equal to $20 per short, the firm should produce a daily quantity of shorts. 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 $20 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 of $ thousand per day for the firm.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?
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4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for running shorts. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 40 40 36 32 28 20 24 20 20 PRICE (Dollars per short) 160 12 ATC AVC 8 MC 4 Profit or Loss 0 0 2 4 6 8 10 12 14 16 18 20 20 QUANTITY (Thousands of shorts per day)
Transcribed Image Text:4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for running shorts. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 40 40 36 32 28 20 24 20 20 PRICE (Dollars per short) 160 12 ATC AVC 8 MC 4 Profit or Loss 0 0 2 4 6 8 10 12 14 16 18 20 20 QUANTITY (Thousands of shorts per day)
In the short run, given a market price equal to $20 per short, the firm should produce a daily quantity of shorts. 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 $20 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 of $ thousand per day for the firm.
Transcribed Image Text:In the short run, given a market price equal to $20 per short, the firm should produce a daily quantity of shorts. 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 $20 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 of $ thousand per day for the firm.
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