Answered: Figure 1 shows the perfectly…

Figure 1 shows the perfectly competitive market a certain firm faces. What is the profit maximizing quantity for this firm? 09 2 O-14

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

Price
9
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O 14
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Figure 1 shows the perfectly competitive market a certain firm faces. What is
the profit maximizing quantity for this firm?
ATC
Price
Quantity

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Refer to the graph shown, which depicts a perfectly competitive firm that maximizes profit. If the prevailing market price is $4: Price 8765432-0 1 ง C MC ATC 0 20 40 60 80 100 120 Output per day Show Transcribed Text LRAC Group of answer choices Economic profits are $500 and the quantity supplied from the firm is 200 units per day. Economic profits are $0 and the quantity supplied from the firm is 100 units per day. Economic profits are $100 and the quantity supplied from the firm is 100 units per day. Economic profits are -$100 and the quantity supplied from the firm is 80 units per day.
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1. Explain the relationship between price, marginal revenue and average revenue for a perfectly competitive firm? 2. When does a perfectly competitive firm maximize their profits? What they should do if at their current production level their marginal revenue is greater than marginal cost? 3. Explain the difference between a shut-down decision and exiting decision for a competitive firm? When and how they make such decision? 4. Refer to the graph below: Price 19 18 MC 16 12 ATC 1 2 3 43 6 1 8 Quantity In the above graph, assume that the price per unit is $10. Based on this information calculate: a. Profit maximization quantity b. Total revenue at that level c. Total cost at that level d. Profit or loss for this firm (if any) Please refer to the discussion board requirement announcement before posting. First post due on Thursday, May 6th, and reply to two other student's posts due on Sunday, May 9th.
Please see the attached23
Price and costs (dollars) 20 16 12 8 4 0 5 10 MC ATC 20 15 Quantity (per day) The figure above shows short-run cost curves for a perfectly competitive firm. If the price of the product is $8, in the short run the firm will Select one: O a. incur an economic loss O b. earn an economic profit O c. earn a normal profit O d. None of the provided answers is correct because more information is needed to determine the firm's profit or loss
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