The graph presents the costs and revenue for a purely competitive firm, where the market price is equal to $600 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.**Question:**What is the profit-maximizing output of this purely competitive firm? Round your answer to the nearest whole number.Profit-maximizing output = [ ] units of outputWhat is the maximum level of profits for this purely competitive firm? Round your answer to the nearest positive or negative integer.Maximum level of profits = $[ ]**Graph Explanation:**The graph titled "Cost and revenue" shows the relationship between various costs and revenue for different units of output. - The **x-axis** represents units of output, ranging from 0 to 15.- The **y-axis** represents cost and revenue in dollars, ranging from $200 to $2,400.There are four curves plotted on the graph:1. **Average Total Cost (ATC)**: This curve is U-shaped, initially decreasing, reaching a minimum, and then increasing as output increases.2. **Marginal Cost (MC)**: This curve initially decreases, then increases, intersecting the Average Total Cost (ATC) curve at its minimum point.3. **Average Variable Cost (AVC)**: Similar in shape to the ATC curve but positioned below it, initially decreasing and then increasing.4. **Marginal Revenue (MR)**: This is a horizontal line at $600, indicating constant marginal revenue per unit sold, equal to the market price.The profit-maximizing output level for a purely competitive firm occurs where the Marginal Cost (MC) curve intersects the Marginal Revenue (MR) line.

In purely competitive market, price is constant so profit is maximised at a point where Price =…

Question 8 of 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $600 per $2,400 unit of output. This firm has a fixed cost equal to $3,600. Use 2,200 this information to determine the profit-maximizing output 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 Average variable cost 800 profit-maximizing output = units of output 600 Marginal revenue 400 200 What is the maximum level of profits for this purely 1 2 3 4 5 6 7 10 11 12 13 14 15 competitive firm? Round your answer to the nearest positive Units of output or negative integer. maximum level of profits = $

Question 8 of 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $600 per $2,400 unit of output. This firm has a fixed cost equal to $3,600. Use 2,200 this information to determine the profit-maximizing output 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 Average variable cost 800 profit-maximizing output = units of output 600 Marginal revenue 400 200 What is the maximum level of profits for this purely 1 2 3 4 5 6 7 10 11 12 13 14 15 competitive firm? Round your answer to the nearest positive Units of output or negative integer. 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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