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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