At its current level of production a profit-maximizing firm in a competitive market receives $15 for each unit it produces, and faces an average cost of $10. At the market price of $15, the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. A. Draw a diagram that depicts the typical firm in this market. B. What is the firm’s current profit? C. What changes are likely to occur in this market and why?
At its current level of production a profit-maximizing firm in a competitive market receives $15 for each unit it produces, and faces an average cost of $10. At the market price of $15, the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. A. Draw a diagram that depicts the typical firm in this market. B. What is the firm’s current profit? C. What changes are likely to occur in this market and why?
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 11E
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At its current level of production a profit-maximizing firm in a competitive market receives $15 for each unit it produces, and faces an average cost of $10. At the market price of $15, the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units. A. Draw a diagram that depicts the typical firm in this market. B. What is the firm’s current profit? C. What changes are likely to occur in this market and why?
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