$ per unit3230282624I22864220181614II121086420IIIIIIIIIIIIIIIIII0 0.5 11.52II2.53 3.5 4 4.5Quantity of Output (q)5MC5.56ATCAVC6.5 7 Consider the cost curvesof a firm in a perfectlycompetitive marketshown above. If themarket price is $24, howmuch profit will the firmmake: Question 14options: $52 $65 $156 $78

Profit refers to the sum of money that the producer or seller earns over and above the cost of…

Answered: Consider the cost curves of a firm in a…

Consider the cost curves of a firm in a perfectly competitive market shown above. If the market price is $24, how much profit will the firm make: Question 14 options: $52 $65 $156 $ 78

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 35CTQ: Why will profits for films in a perfectly competitive industry tend to vanish in the long run?

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Concept explainers

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.

Question

$ per unit
32
30
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26
24
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228642
20
18
16
14
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I
12
10
8
6
4
2
0
I
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0 0.5 1
1.5
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2.5
3 3.5 4 4.5
Quantity of Output (q)
5
MC
5.5
6
ATC
AVC
6.5 7

Consider the cost curves
of a firm in a perfectly
competitive market
shown above. If the
market price is $24, how
much profit will the firm
make: Question 14
options: $52 $65 $156 $
78

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100 90 80 70 60 ATC 50 40 30 20 AVC МС О 10 + 0 0 5 10 15 20 30 35 40 45 50 QUANTITY (Thousands of shirts) or each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume hat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing uantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will nake a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Profit or Loss? Produce or Shut Down? Shut down 10 20,000 Loss Shut down 20 10,000 Loss Shut down 32 5,000 Loss Either 0 or 37,500 Shut down 40 Loss 25 COSTS (Dollars)
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