Q4.Refer to the figure below. If the firm is producing the level of output which maximizes profit, its total revenue is ________. (Hint: after finding the profit-maximizing quantity, use the demand curve to identify the corresponding price.) a.) $480 b.) $420 c.) $160 d.) $540 The image displays a graph representing cost and revenue curves in microeconomics. The graph plots Price ($) on the vertical axis and Quantity on the horizontal axis. Here's a detailed explanation:1. **Curves:** - **MC₁ (Marginal Cost):** This curve is upward-sloping, typically representing the cost of producing one more unit of a good. - **ATC₁ (Average Total Cost):** This U-shaped curve represents the average total cost per unit at different production levels. - **AVC₁ (Average Variable Cost):** Another U-shaped curve below the ATC curve, indicating the average variable cost per unit. - **MR₁ (Marginal Revenue):** Downward-sloping dashed blue line, representing the additional revenue from selling one more unit. - **D₁ (Demand Curve):** Downward-sloping solid blue line, illustrating the relationship between price and quantity demanded.2. **Intersection Points:** - The intersection of MC₁ and MR₁ helps determine the profit-maximizing quantity. - The point where the demand curve (D₁) intersects with any cost curve can indicate various economic insights such as pricing or loss/profit scenarios.This graph can be used to analyze economic concepts such as profit maximization, cost management, and pricing strategy.

Ans) the correct option is a) $ 480

Refer to the figure below. If the firm is producing the level of output which maximizes profit, its total revenue is ________. (Hint: after finding the profit-maximizing quantity, use the demand curve to identify the corresponding price.) a.) $480 b.) $420 c.) $160 d.) $540

Refer to the figure below. If the firm is producing the level of output which maximizes profit, its total revenue is ________. (Hint: after finding the profit-maximizing quantity, use the demand curve to identify the corresponding price.) a.) $480 b.) $420 c.) $160 d.) $540

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

100%

Q4.

a.) $480

b.) $420

c.) $160

d.) $540

The image displays a graph representing cost and revenue curves in microeconomics. The graph plots Price ($) on the vertical axis and Quantity on the horizontal axis. Here's a detailed explanation:

1. **Curves:**
- **MC₁ (Marginal Cost):** This curve is upward-sloping, typically representing the cost of producing one more unit of a good.
- **ATC₁ (Average Total Cost):** This U-shaped curve represents the average total cost per unit at different production levels.
- **AVC₁ (Average Variable Cost):** Another U-shaped curve below the ATC curve, indicating the average variable cost per unit.
- **MR₁ (Marginal Revenue):** Downward-sloping dashed blue line, representing the additional revenue from selling one more unit.
- **D₁ (Demand Curve):** Downward-sloping solid blue line, illustrating the relationship between price and quantity demanded.

2. **Intersection Points:**
- The intersection of MC₁ and MR₁ helps determine the profit-maximizing quantity.
- The point where the demand curve (D₁) intersects with any cost curve can indicate various economic insights such as pricing or loss/profit scenarios.

This graph can be used to analyze economic concepts such as profit maximization, cost management, and pricing strategy.

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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