An ice-cream parlour in Rome operates in a perfectly competitive market. For the ice-cream seller whose marginal, average variable, and average total cost curves are shown in the diagram below, what is the profit-maximizing level of output and the corresponding price in the short-run? AVC 2.50 1.75 0.50 75 200 250 Select one: O a. The profit-maximizing output is Q = 250 and the corresponding price is P = 2.50 o b. The profit-maximizing output is Q = 200 and the corresponding price is P = 2.50 o c. The profit-maximizing output is Q = 250 and the corresponding price is P = 1.15 o d. The profit-maximizing output is Q = 75 and the corresponding price is P = 1.75
An ice-cream parlour in Rome operates in a perfectly competitive market. For the ice-cream seller whose marginal, average variable, and average total cost curves are shown in the diagram below, what is the profit-maximizing level of output and the corresponding price in the short-run? AVC 2.50 1.75 0.50 75 200 250 Select one: O a. The profit-maximizing output is Q = 250 and the corresponding price is P = 2.50 o b. The profit-maximizing output is Q = 200 and the corresponding price is P = 2.50 o c. The profit-maximizing output is Q = 250 and the corresponding price is P = 1.15 o d. The profit-maximizing output is Q = 75 and the corresponding price is P = 1.75
Chapter12: Firms In Perfectly Competitive Markets
Section: Chapter Questions
Problem 9P
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hi! may i know how to do this qns?
![An ice-cream parlour in Rome operates in a perfectly competitive market. For the ice-cream
seller whose marginal, average variable, and average total cost curves are shown in the
diagram below, what is the profit-maximizing level of output and the corresponding price in
the short-run?
P
AVC
2.50
1.75
0.50
75
200 250
Select one:
O a. The profit-maximizing output is Q = 250 and the corresponding price is P = 2.50
o b. The profit-maximizing output is Q = 200 and the corresponding price is P = 2.50
O c. The profit-maximizing output is Q = 250 and the corresponding price is P = 1.15
o d. The profit-maximizing output is Q = 75 and the corresponding price is P = 1.75](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F188db0f4-95c9-4bf1-b1b6-7450f039c61f%2F8165643d-8535-46d5-8569-e34cc8ed639e%2Fdq6imvl_processed.png&w=3840&q=75)
Transcribed Image Text:An ice-cream parlour in Rome operates in a perfectly competitive market. For the ice-cream
seller whose marginal, average variable, and average total cost curves are shown in the
diagram below, what is the profit-maximizing level of output and the corresponding price in
the short-run?
P
AVC
2.50
1.75
0.50
75
200 250
Select one:
O a. The profit-maximizing output is Q = 250 and the corresponding price is P = 2.50
o b. The profit-maximizing output is Q = 200 and the corresponding price is P = 2.50
O c. The profit-maximizing output is Q = 250 and the corresponding price is P = 1.15
o d. The profit-maximizing output is Q = 75 and the corresponding price is P = 1.75
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