a. the increase in profit when output is reduced from 8 to 7 units of output. b. the profit that could be made if output increases from 7 to 8 units of output. c. the deadweight loss associated with the power of the price taking firm. d. the amount of profit when 8 units of output are produced.

a. the increase in profit when output is reduced from 8 to 7 units of output. b. the profit that could be made if output increases from 7 to 8 units of output. c. the deadweight loss associated with the power of the price taking firm. d. the amount of profit when 8 units of output are produced.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a. the increase in profit when output is reduced from 8 to 7 units of output.
b. the profit that could be made if output increases from 7 to 8 units of output.
c. the deadweight loss associated with the power of the price taking firm.
d. the amount of profit when 8 units of output are produced.

Refer to the figure. The shaded area in the graph shows:
Price
(dollars per
unit)
40
30
20
10
1
ATC
F
AVC
2
3
4
M
6
8
MC
Q
1
10
AR-MR-P
11
Output

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