Help completing the graph **Educational Content: Analyzing Cost Curves****Graph Explanation:**The graph displayed illustrates the cost and output relationship for a firm, using the following curves:- **ATC (Average Total Cost):** The green curve shows the average total cost per unit of output (shirts). It initially declines, reaches a minimum point, and then rises.- **AVC (Average Variable Cost):** The purple curve represents the average variable cost per unit. Like the ATC curve, it initially decreases and then increases.- **MC (Marginal Cost):** The orange curve shows the marginal cost, which typically intersects the ATC and AVC at their minimum points.- **Axes:** - The horizontal axis (x-axis) represents the quantity of output (shirts) ranging from 0 to 40. - The vertical axis (y-axis) indicates the price and cost in dollars per shirt, going from 0 to 50.**Task Description:**Below the graph, the task requires you to determine the firm's production decision in the short run:- At a market price of $20 per shirt, decide the number of shirts the firm will choose to produce. Additionally, you are instructed to identify the area representing the firm's profit or loss by utilizing blue rectangle symbols to shade it in the graph.**Important Note:**- Enter positive numbers in the numeric entry field for profit calculations. The task also asks you to calculate the firm's profit or loss per day based on the shaded rectangle's area. **Cengage | MindTap****Homework (Ch 08)****4. Short-run profit maximization or loss minimization for a perfectly competitive firm**Suppose that the market for polo shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market.**Graph Explanation:**- **Axes:** - The vertical axis represents "Price" and "Cost" per shirt in dollars. - The horizontal axis represents the "Quantity of Output" in shirts.- **Curves:** - **MC (Marginal Cost):** Orange upward-sloping curve. - **ATC (Average Total Cost):** Green U-shaped curve. - **AVC (Average Variable Cost):** Purple U-shaped curve below the ATC curve.**Graph Interpretation:**The graph displays three key cost curves for a firm in a perfectly competitive market. The intersection of these curves is crucial for determining the profit-maximizing level of output.**Task:**"In the short run, at a market price of $20 per shirt, this firm will choose to produce _______ shirts per day."(Note: The exact number of shirts is not filled in as it depends on analyzing the intersection points on the graph.)

In a competitive firm there are large number off firms selling identical products thus they are…

45 Profit or Loss 40 35 30 ATC 25 20 15 10 AVC 5. MO + 4 8 12 QUANTITY OF OUTPUT (Shirts) 16 20 24 28 32 36 40 In the short run, at a market price of $20 per shirt, this firm will choose to produce shirts 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 $ per day.

45 Profit or Loss 40 35 30 ATC 25 20 15 10 AVC 5. MO + 4 8 12 QUANTITY OF OUTPUT (Shirts) 16 20 24 28 32 36 40 In the short run, at a market price of $20 per shirt, this firm will choose to produce shirts 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 $ per day.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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