I think either 10 or 15 please help ? This graph illustrates the cost and price dynamics in a perfectly competitive market. The vertical axis represents "PRICE OR COST" in dollars per unit, ranging from 4 to 23. The horizontal axis represents "QUANTITY," with values labeled at intervals of 13, 25, 31, and 39.Three key curves are displayed:1. **MC (Marginal Cost)**: This curve slopes upward, intersecting the other curves at various points.2. **ATC (Average Total Cost)**: Positioned above the AVC curve, it shows a typical U-shape, reflecting economies and diseconomies of scale.3. **AVC (Average Variable Cost)**: Also U-shaped but consistently below the ATC, this curve indicates the variable costs per unit quantity as production increases.Key Points on the Graph:- **Point A** at a quantity of 13 intersects the AVC at a price of 4.- **Point B** at a quantity of 25 intersects both the MC and the ATC at a price of 10.- **Point C** aligns with the MC and ATC at a quantity of 31 and a price of 15.- **Point D** indicates a further intersection on the MC curve at a quantity of 39 and a price of 23.Conclusion:The text "A perfectly competitive firm should shut down at any price below" implies firms should cease operation if prices fall below the minimum point on the AVC curve. This is because they would be unable to cover their variable costs, resulting in losses.

Answered: PRICE OR COST (an and stop) 23 5 10 13…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I think either 10 or 15 please help ?

This graph illustrates the cost and price dynamics in a perfectly competitive market. The vertical axis represents "PRICE OR COST" in dollars per unit, ranging from 4 to 23. The horizontal axis represents "QUANTITY," with values labeled at intervals of 13, 25, 31, and 39.

Three key curves are displayed:

1. **MC (Marginal Cost)**: This curve slopes upward, intersecting the other curves at various points.

2. **ATC (Average Total Cost)**: Positioned above the AVC curve, it shows a typical U-shape, reflecting economies and diseconomies of scale.

3. **AVC (Average Variable Cost)**: Also U-shaped but consistently below the ATC, this curve indicates the variable costs per unit quantity as production increases.

Key Points on the Graph:
- **Point A** at a quantity of 13 intersects the AVC at a price of 4.
- **Point B** at a quantity of 25 intersects both the MC and the ATC at a price of 10.
- **Point C** aligns with the MC and ATC at a quantity of 31 and a price of 15.
- **Point D** indicates a further intersection on the MC curve at a quantity of 39 and a price of 23.

Conclusion:
The text "A perfectly competitive firm should shut down at any price below" implies firms should cease operation if prices fall below the minimum point on the AVC curve. This is because they would be unable to cover their variable costs, resulting in losses.

Expert Solution

Step 1: Define perfectly competitive market

The perfectly competitive market has a huge number of buyers and sellers. The market is characterized by homogeneous products. Buyers and sellers have complete information about the market and they are able to freely enter and exit the market. A competitive market is the price taker because the seller and buyer cannot control the price due to large competition among firms.

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