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(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:   a. $1,190.   b. $3,400.   c. $1,700.   d . $3,060.

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:   a. $1,190.   b. $3,400.   c. $1,700.   d . $3,060.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Reference: Ref 11-2

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:

 

a. $1,190.

 

b. $3,400.

 

c. $1,700.

 

d

. $3,060.

 

Price and cost $40 30 23 20 10 0 Reference: Ref 11-2 MR MC 150 200 ATC ATC AR=D Quantity per day (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) S fixed costs and reduces cost from ATC to ATC'. Suppose further that af it costs a total of $18 per unit to produce 170 units per day. If the firm net profit will be:
Transcribed Image Text:Price and cost $40 30 23 20 10 0 Reference: Ref 11-2 MR MC 150 200 ATC ATC AR=D Quantity per day (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) S fixed costs and reduces cost from ATC to ATC'. Suppose further that af it costs a total of $18 per unit to produce 170 units per day. If the firm net profit will be:
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