**Profit Maximization for a Purely Competitive Firm**The graph presents the costs and revenue for a purely competitive firm, where the market price is equal to $300 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the profit-maximizing output and profit for this firm.**Profit-Maximizing Output**What is the profit-maximizing output of this purely competitive firm? Round your answer to the nearest whole number.- Profit-maximizing output: [Enter numeric value] units of output **Maximum Level of Profits**What is the maximum level of profits for this purely competitive firm? Round your answer to the nearest positive or negative whole number.- Maximum level of profits: $ [Enter numeric value] **Graph Explanation:**The graph displays four curves labeled as follows:- **Marginal Cost (MC):** This curve typically intersects the marginal revenue line where profit maximization occurs. - **Average Total Cost (ATC):** This curve shows the average cost per unit, which decreases, reaches a minimum, and then rises.- **Average Variable Cost (AVC):** This is the cost curve that starts lower than and rises similarly to the ATC.- **Marginal Revenue (MR):** Represented by a horizontal line at $300, indicating the market price in a perfectly competitive setting.Each curve is plotted against the “Unit of Output” on the x-axis and “Cost and Revenue” in dollars on the y-axis. The intersection of the MC and MR curves generally indicates the profit-maximizing output.

A perfectly competitive market is a market that has such a large number of buyers and sellers that…

Questiðn ốf 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $300 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the profit-maximizing output $2,400 2,200 Marginal cost 2,000 and profit for this firm. 1,800 What is the profit-maximizing output of this purely Average total cost 1,600 competitive firm? Round your answer to the nearest 1,400 whole number. 1,200 1,000 800 600 Average variable e profit-maximizing output: units of output 400 Enter numeric value 200 Marginal revenue What is the maximum level of profits for this purely 9 10 11 12 13 14 Unit of outp 1 3 4 6 7 8 competitive firm? Round your answer to the nearest positive or negative whole number. maximum level of profits: $

Questiðn ốf 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $300 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the profit-maximizing output $2,400 2,200 Marginal cost 2,000 and profit for this firm. 1,800 What is the profit-maximizing output of this purely Average total cost 1,600 competitive firm? Round your answer to the nearest 1,400 whole number. 1,200 1,000 800 600 Average variable e profit-maximizing output: units of output 400 Enter numeric value 200 Marginal revenue What is the maximum level of profits for this purely 9 10 11 12 13 14 Unit of outp 1 3 4 6 7 8 competitive firm? Round your answer to the nearest positive or negative whole number. maximum level of profits: $

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

**Profit Maximization for a Purely Competitive Firm**

The graph presents the costs and revenue for a purely competitive firm, where the market price is equal to $300 per unit of output. This firm has a fixed cost equal to $3,600. Use this information to determine the profit-maximizing output and profit for this firm.

**Profit-Maximizing Output**

What is the profit-maximizing output of this purely competitive firm? Round your answer to the nearest whole number.

- Profit-maximizing output: [Enter numeric value] units of output

**Maximum Level of Profits**

What is the maximum level of profits for this purely competitive firm? Round your answer to the nearest positive or negative whole number.

- Maximum level of profits: $ [Enter numeric value]

**Graph Explanation:**

The graph displays four curves labeled as follows:

- **Marginal Cost (MC):** This curve typically intersects the marginal revenue line where profit maximization occurs.

- **Average Total Cost (ATC):** This curve shows the average cost per unit, which decreases, reaches a minimum, and then rises.

- **Average Variable Cost (AVC):** This is the cost curve that starts lower than and rises similarly to the ATC.

- **Marginal Revenue (MR):** Represented by a horizontal line at $300, indicating the market price in a perfectly competitive setting.

Each curve is plotted against the “Unit of Output” on the x-axis and “Cost and Revenue” in dollars on the y-axis. The intersection of the MC and MR curves generally indicates the profit-maximizing output.

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