The graph illustrates the marginal cost (MC), average total cost (ATC), and marginal revenue (MR) curves for a perfectly competitive firm. For such firms, the demand (D) curve coincides with the MR curve.### Questions:1. **How many units should this firm produce to maximize profit?** **Number of units:** [Enter your answer]2. **What price will the firm receive for each unit at the profit-maximizing level of output?** **Price:** $ [Enter your answer]### Graph Explanation:- **Curves:** - The **MC curve** is upward-sloping and intersects both the ATC and the MR curves. - The **ATC curve** forms a U-shape, indicating the average cost per unit. - The **D=MR curve** is a horizontal line, reflecting a constant price of $12. - **Intersection Points:** - The MC curve intersects the MR curve at approximately 10.2 units of quantity, indicating the profit-maximizing level of output. - The corresponding price level is $12, where D=MR intersects.- **Axes:** - The horizontal axis represents Quantity. - The vertical axis represents cost and revenue in dollars.By producing at the point where MC equals MR, the firm maximizes its profit. The price per unit is determined by where the MR curve (which is also the demand curve) stands on the graph.

A perfectly competitive firm is a firm that gains a profit where the price is equal to MR. It…

he graph shows the marginal cost (MC), average total cost TC), and marginal revenue (MR) curves for a perfectly (or rely) competitive firm. Note, for such firms, the demand ) curve is the same as the MR curve. Answer two estions, specifying to at least one decimal place. ow many units should this firm produce to maximize profit? umber of units: hat price will the firm receive for each unit at the profit aximizing level out output? MC/MR $12 9.7 5.6 D=MR MC ATC 6.6 10.2 12 16 Quantit

he graph shows the marginal cost (MC), average total cost TC), and marginal revenue (MR) curves for a perfectly (or rely) competitive firm. Note, for such firms, the demand ) curve is the same as the MR curve. Answer two estions, specifying to at least one decimal place. ow many units should this firm produce to maximize profit? umber of units: hat price will the firm receive for each unit at the profit aximizing level out output? MC/MR $12 9.7 5.6 D=MR MC ATC 6.6 10.2 12 16 Quantit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume you look at the graph of a perfectly competitive firm and its average total cost curve is entirely above the horizontal price line. In this case the firm is breaking even. O True O False
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The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for snapback hats. COSTS (Dollars) 100 100 80 90 80 20 70 70 HD 50 40 30 20 0 11 D 10 O MC Price (Dollars per snapback) 15 15 20 25 55 70 85 201 ATC 0 D AVC O 50 60 70 80 QUANTITY (Thousands of snapbacks) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of snapbacks for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero snapbacks and the profit-maximizing quantity of snapbacks.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. □ Quantity (Snapbacks) BO 100 ▼ On the following graph, use the orange points (square symbol) to…
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Question 18 Suppose a perfectly competitive firm faces the following situation: P = $10, output= 3,000, ATC= $8.50, MC $11, and AVC=$7.50. Which statement accurately describes the firm's situation? = O The firm incurs a loss and is minimizing its losses. O The firm carns a profit but should increase output to maximize its profits. O The firm is maximizing its profits. The firm earns a profit but should decrease output to maximize its profits.
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Please answer F and show steps for the graph
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