4. Profit maximization in the cost-curve diagram Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. PRICE (Dollars per watch) 100 90 80 70 60 50 30 ४ MC ATC AVC Profit or Loss ? PRICE (Dollars p 8 8 30 20 10 0 4 0 MC ATC AVC 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of watches) In the short run, at a market price of $80 per watch, this firm will choose to produce watches per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $80 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be s per day.

4. Profit maximization in the cost-curve diagram Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. PRICE (Dollars per watch) 100 90 80 70 60 50 30 ४ MC ATC AVC Profit or Loss ? PRICE (Dollars p 8 8 30 20 10 0 4 0 MC ATC AVC 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of watches) In the short run, at a market price of $80 per watch, this firm will choose to produce watches per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $80 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be s 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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Question

Economics

4. Profit maximization in the cost-curve diagram
Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this
market.
Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
PRICE (Dollars per watch)
100
90
80
70
60
50
30
४
MC
ATC
AVC
Profit or Loss
?

PRICE (Dollars p
8
8
30
20
10
0
4
0
MC
ATC
AVC
10 20 30 40 50 60 70 80 90 100
QUANTITY (Thousands of watches)
In the short run, at a market price of $80 per watch, this firm will choose to produce
watches per day.
On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $80 and
the firm chooses to produce the quantity you already selected.
Note: In the following question, enter a positive number, even if it represents a loss.
The area of this rectangle indicates that the firm's
would be s
per day.

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