In the short run, at a market price of $20 per wind chime, this firm will choose to produce _______ wind chimes per day.On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected.**Note:** In the following question, enter a positive number, even if it represents a loss.The area of this rectangle indicates that the firm’s _______ would be $______ thousand per day in the short run. # Profit Maximization in the Cost-Curve Diagram### Competitive Market for Wind ChimesSuppose that the market for wind chimes is a competitive market. The following graph illustrates the daily cost curves of a firm operating within this market.#### Graph Description:- **Axes**: - The horizontal axis represents the **Quantity** (in thousands of wind chimes per day). - The vertical axis represents the **Price** (in dollars per wind chime).- **Curves**: - **ATC (Average Total Cost)**: This curve is shown in green. It typically displays a U-shape due to economies and diseconomies of scale. - **AVC (Average Variable Cost)**: Shown in orange, it is also U-shaped and generally lies below the ATC curve. - **MC (Marginal Cost)**: In purple, this curve intersects the AVC and ATC at their minimum points, following the typical behavior of marginal costs.- **Path of Profit Maximization**: - The rectangle tool allows visualization of profit or loss areas on the graph based on endpoints determined by specific coordinates.### Hint:After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point, enabling analysis of cost and revenue relations. This functionality assists in determining profit or loss areas by comparing the market price with cost curves.

Answer: In the short run, a firm produces that level of output where the price (marginal revenue) is…

In the short run, at a market price of $20 per wind chime, this firm will choose to produce wind chimes per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be thousand per day in the short run.

In the short run, at a market price of $20 per wind chime, this firm will choose to produce wind chimes per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be thousand per day in the short run.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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