Answered: Price $150 $140 MC $140 $130 $120 $110…

Price $150 $140 MC $140 $130 $120 $110 $106 $100 $90 ATC $90 ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ $10 $20 $40 $50 $80 $70 $60 $30 $30 AVC $60 $23.5 $4 $10 Quantity X 1 2 3 4 6 7 8 9 10 11

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Graph below shows costs, price (vertical axis), and quantity of good X (horizontal axis) for firm A operating in a perfectly competitive market.

a. What is firm A’s approximate profit-maximizing level of output if market price is $80? __________Q.

b. Firm A’s total profit when market price is now $100 $ __________.

c. Firm A’s Average Fixed Cost at 3 units of X is $__________.

d. Firm A’s Total Cost at 4 units of X is $_____________.

Price
$150
$140
MC
$140
$130
$120
$110
$106
$100
$90
ATC
$90
៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖ ៖
$10
$20
$40
$50
$80
$70
$60
$30
$30
AVC
$60
$23.5
$4
$10
Quantity X
1
2
3
4
6
7
8
9
10
11

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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