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.

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