Please note that this question has not yet been graded. I keep getting the error message that this question can't be answered because of it being graded and it hasn't been. Thank you. ### Homework (Ch 10)#### 2. Profit Maximization of a Seller in a Competitive Price-Searcher MarketConsider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run.**Task:**- Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. - If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. - If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss.**Graph Description:**The graph below displays the following curves:- **Demand Curve:** Depicted in black.- **Marginal Revenue (MR) Curve:** Depicted in green.- **Marginal Cost (MC) Curve:** Depicted in blue.- **Average Total Cost (ATC) Curve:** Depicted in orange.The horizontal axis represents the quantity of doughnuts, while the vertical axis represents the price in dollars per doughnut. The intersection of the MR and MC curves indicates the profit-maximizing quantity and price for Unico Doughnut. The ATC curve helps determine the profit or loss by comparing the price to the average total cost at the profit-maximizing quantity.**Legend:**- **Profit Maximizing Outcome:** Illustrated with a black plus sign.- **Profit:** Highlighted with green triangles forming a rectangle.- **Loss:** Highlighted with purple diamonds forming a rectangle.By analyzing the graph, students can better understand how to determine the profit-maximizing output and price, and how to calculate the areas of profit or loss depending on whether the price exceeds or is below the average total cost at the chosen output level.![Graph Explanation](Image URL)Through this exercise, students can apply the concepts of profit maximization and cost analysis in a competitive price-searcher market, enhancing their understanding of microeconomic principles. ### Homework (Ch 10)#### Graph Explanation:The given graph displays several curves that are essential for understanding profit maximization in microeconomics:- **Price (Dollars per doughnut) on the Y-axis** and **Quantity (Thousands of doughnuts) on the X-axis**.- **MC (Marginal Cost)**: This is the orange upward-sloping line showing the cost to produce one more unit of a good.- **MR (Marginal Revenue)**: This is the black downward-sloping line representing the additional revenue from selling one more unit of a good.- **ATC (Average Total Cost)**: This is the green U-shaped line showing the cost per unit of output on average.- **Demand Curve**: This is the blue downward-sloping line showing the relationship between price and quantity demanded.The intersection of **MC** and **MR** indicates the profit-maximizing output level. The **ATC** curve helps in determining whether the firm is making a profit or a loss at the profit-maximizing output level.**Profit Maximizing Outcome** is indicated with green arrows and typically occurs where MR equals MC.- **Profit**: Indicated with green arrows where price (on the Demand curve) is above ATC.- **Loss**: Indicated with purple arrows where price (on the Demand curve) is below ATC.#### Homework Questions:1. **At the profit-maximizing output and price, the shop’s profit is equal to:** - $ _____________ (Hint: Be sure to enter a minus sign if profit is negative.)2. **Given the profit-maximizing choice of output and price, there are __________ shops in the industry than there would be in long-run equilibrium.**#### Answer the above questions based on your understanding of the graph provided.---For additional resources and clarifications on Profit Maximization, visit the "Study Tools for Principles of Economics" section in your course module.

Q Search this course X CENGAGE MINDTAP Homework (Ch 10) 2. Profit maximization of a seller in a competitive price-searchermarket Consider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. ? 4.00 3.50 Profit Maximizing Outcome 3.00 2.50 Profit 2.00 ATC Loss 1.50 1.00 PRICE (Dollars per doughnut)

Q Search this course X CENGAGE MINDTAP Homework (Ch 10) 2. Profit maximization of a seller in a competitive price-searchermarket Consider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. ? 4.00 3.50 Profit Maximizing Outcome 3.00 2.50 Profit 2.00 ATC Loss 1.50 1.00 PRICE (Dollars per doughnut)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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