Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.**Hint**: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.### Graph Explanation**Graph Components:**- **Axes**: - *X-axis*: QUANTITY (Thousands of candles per day) - *Y-axis*: PRICE (Dollars per candle)- **Curves**: - *MC (Marginal Cost)*: Orange curve - *ATC (Average Total Cost)*: Green curve - *AVC (Average Variable Cost)*: Purple curveThe graph displays the cost structures of a firm making candles, with the Marginal Cost, Average Total Cost, and Average Variable Cost plotted against the quantity of output.### InstructionsIn the short run, at a market price of $20 per candle, this firm will choose to produce _______ candles 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 refers to the process taken up by the firms to make sure that the best output…

n the short run, at a market price of $20 per candle, this firm will choose to produce candles 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 he 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 s thousand per day in the short run.

n the short run, at a market price of $20 per candle, this firm will choose to produce candles 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 he 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 s 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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