Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The graph below shows a competitive firm's demand and cost curves. Assume that the firm produces at the profit-maximizing output level. What is the firm's profit? [Recall that in perfect competition a firm’s demand curve is a horizontal line drawn at the market price level and that P=MR=D.]
Group of answer choices
$144
$720
$576
![Price (P)
36
32
28
24
20
16
12
8
4
MC1
ATC
D
AVC1
6 12 18 24 30 36 42 48 54
Quantity (Q)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe696ec90-56ad-464e-a544-3651b157361e%2F29af5ccc-847a-4d7b-8ee9-e3e95e10ca87%2Fu6qymem_processed.png&w=3840&q=75)
Transcribed Image Text:Price (P)
36
32
28
24
20
16
12
8
4
MC1
ATC
D
AVC1
6 12 18 24 30 36 42 48 54
Quantity (Q)
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