Price and cost (dollars) 20 15.75 21 6,000 A B 8,000 SMC 1000 ATC AVC D-MR-$20 Quantity The above graph is for a perfectly competitive firm. The curve labelled "SMC " is the Marginal Cost curve, D-Demand and Marginal Revenue curve, ATC-average total cost curve, AVC is the average variable cost curve. (a) What is the profit maximizing price and output? (b) At the profit maximizing price and output what is the average total cost and average variable cost and average fixed cost? (c) At the profit maximizing price and output what is the amount of profit earned by this firm? (d) At what price would the firm earn zero profit (or loss)?

Price and cost (dollars) 20 15.75 21 6,000 A B 8,000 SMC 1000 ATC AVC D-MR-$20 Quantity The above graph is for a perfectly competitive firm. The curve labelled "SMC " is the Marginal Cost curve, D-Demand and Marginal Revenue curve, ATC-average total cost curve, AVC is the average variable cost curve. (a) What is the profit maximizing price and output? (b) At the profit maximizing price and output what is the average total cost and average variable cost and average fixed cost? (c) At the profit maximizing price and output what is the amount of profit earned by this firm? (d) At what price would the firm earn zero profit (or loss)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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