Question #2: Using the following graph to answer the following questions: ATC AVC Q 0 4 0, D 0 D 0 0 20, 00 30 0 0 1 Notes: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. By looking of this graph, what can you say about the market power of this firm? Is it a perfect competition Explain b. To maximize the profit, how many units should the firm produce? At what price? C. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain а. or a monopoly?
Question #2: Using the following graph to answer the following questions: ATC AVC Q 0 4 0, D 0 D 0 0 20, 00 30 0 0 1 Notes: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. By looking of this graph, what can you say about the market power of this firm? Is it a perfect competition Explain b. To maximize the profit, how many units should the firm produce? At what price? C. Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? d. Will you operate this firm in the short run? Long run? Briefly explain а. or a monopoly?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Question #2: Using the following graph to answer the
following questions:
ATC
AVC
Q
0 4 0, D 0 D
0 0 20, 00 30
0 0
1
Notes: MC is marginal cost, MR is marginal revenue, ATC is average
total cost, AVC is average variable cost and D is the demand curve.
By looking of this graph, what can you say about the market
power of this firm? Is it a perfect competition
Explain
b. To maximize the profit, how many units should the firm produce?
At what price?
C. Based on your answer, what is the total revenue? Total costs?
Total profit? Total fixed cost?
d. Will you operate this firm in the short run? Long run? Briefly
explain
а.
or a monopoly?
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