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Quantity Quantity of Figures 2.1 and 2.2 represent two different firms in the cake pan industry, which is a perfectly competitive industry. The company in Figure 2.1 is making economic profits and in Figure 2.2 is just breaking even. For each company, complete their graph to show its situation graphically regarding profits/losses. Remember to include connector plots where necessary. It is up to you to decide the price in each situation. (3+3+3+3 marks) igure 2.1 Figure 2.2 P 10.00 MC P MC 9.00 10.00 8.00 9.00 ATC 7.00 ATC 8.00 6.00- 7.00 AVC 5.00 6.00 AVC 4.00 5.00 3.00 4.00- 3.00- 2.00 2.00- 1.00 1.00- 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 678 9 10 11 12 Q (000) 0 (000) while total cost is $ in Figure 2.1 the market price is $ quantity demanded is $ profit or loss for the firm is $ firm is probably in the long run or short run. Shutdown price is $ and In Figure 2.2 the market price is $ and Total revenue is quantity demanded is Total revenue is Economic $ while total cost is $ Economic This profit or loss for the firm is $

Quantity Quantity of Figures 2.1 and 2.2 represent two different firms in the cake pan industry, which is a perfectly competitive industry. The company in Figure 2.1 is making economic profits and in Figure 2.2 is just breaking even. For each company, complete their graph to show its situation graphically regarding profits/losses. Remember to include connector plots where necessary. It is up to you to decide the price in each situation. (3+3+3+3 marks) igure 2.1 Figure 2.2 P 10.00 MC P MC 9.00 10.00 8.00 9.00 ATC 7.00 ATC 8.00 6.00- 7.00 AVC 5.00 6.00 AVC 4.00 5.00 3.00 4.00- 3.00- 2.00 2.00- 1.00 1.00- 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 678 9 10 11 12 Q (000) 0 (000) while total cost is $ in Figure 2.1 the market price is $ quantity demanded is $ profit or loss for the firm is $ firm is probably in the long run or short run. Shutdown price is $ and In Figure 2.2 the market price is $ and Total revenue is quantity demanded is Total revenue is Economic $ while total cost is $ Economic This profit or loss for the firm is $

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition
Section: Chapter Questions
Problem 1E
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Quantity Quantity of Figures 2.1 and 2.2 represent two different firms in the cake pan industry, which is a perfectly competitive industry. The company in Figure 2.1 is making economic profits and in Figure 2.2 is just breaking even. For each company, complete their graph to show its situation graphically regarding profits/losses. Remember to include connector plots where necessary. It is up to you to decide the price in each situation. (3+3+3+3 marks) igure 2.1 Figure 2.2 P 10.00 MC P MC 9.00 10.00 8.00 9.00 ATC 7.00 ATC 8.00 6.00- 7.00 AVC 5.00 6.00 AVC 4.00 5.00 3.00 4.00- 3.00- 2.00 2.00- 1.00 1.00- 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 678 9 10 11 12 Q (000) 0 (000) while total cost is $ in Figure 2.1 the market price is $ quantity demanded is $ profit or loss for the firm is $ firm is probably in the long run or short run. Shutdown price is $ and In Figure 2.2 the market price is $ and Total revenue is quantity demanded is Total revenue is Economic $ while total cost is $ Economic This profit or loss for the firm is $
Transcribed Image Text:Quantity Quantity of Figures 2.1 and 2.2 represent two different firms in the cake pan industry, which is a perfectly competitive industry. The company in Figure 2.1 is making economic profits and in Figure 2.2 is just breaking even. For each company, complete their graph to show its situation graphically regarding profits/losses. Remember to include connector plots where necessary. It is up to you to decide the price in each situation. (3+3+3+3 marks) igure 2.1 Figure 2.2 P 10.00 MC P MC 9.00 10.00 8.00 9.00 ATC 7.00 ATC 8.00 6.00- 7.00 AVC 5.00 6.00 AVC 4.00 5.00 3.00 4.00- 3.00- 2.00 2.00- 1.00 1.00- 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 678 9 10 11 12 Q (000) 0 (000) while total cost is $ in Figure 2.1 the market price is $ quantity demanded is $ profit or loss for the firm is $ firm is probably in the long run or short run. Shutdown price is $ and In Figure 2.2 the market price is $ and Total revenue is quantity demanded is Total revenue is Economic $ while total cost is $ Economic This profit or loss for the firm is $
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