Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.**Hint:** After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.### GraphThe graph is titled "Profit or Loss" and consists of three main curves plotted on a grid. The x-axis represents the "QUANTITY (Thousands of shirts per day)" and ranges from 0 to 20. The y-axis denotes the "PRICE (Dollars per shirt)" and ranges from 0 to 50.- **MC Curve (Marginal Cost)**: This curve is orange and U-shaped, representing the firm's marginal cost at different levels of output.- **AVC Curve (Average Variable Cost)**: This curve is purple and U-shaped, showing the average variable cost for various quantities.- **ATC Curve (Average Total Cost)**: This curve is green and U-shaped, depicting the average total cost for different quantities.### InstructionsIn the short run, at a market price of $15 per shirt, this firm will choose to produce ________ shirts per day.On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm’s profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected.**Note:** In the following question, enter a positive number, even if it represents a loss.The area of this rectangle indicates that the firm’s ________ would be $________ thousand per day in the short run.

Perfect competition refers to the situation where there is the large number of sellers and buyers exist, a homogenous product where consumers have perfect knowledge about the price and product.In perfect competition, the optimal situation occurs where MR = MC here MC = 15 when the Quantity is 8,000 Loss is shown in the blue rectangle, where the area of loss =oxyz. Loss = (8,000-0)*(30-15) Loss = 8000*15 Loss = 1,20,000

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Economics

Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 50 46 Profit or Loss 40 35 30 ATC 26 20 15 AVC 10 MC 4 6 8 10 12 14 18 QUANTITY (Thousands of shirts per day) 2 18 20 In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be $ thousand per day in the short run. PRICE (Dollars per shirt)

Suppose that the market for dress shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 50 46 Profit or Loss 40 35 30 ATC 26 20 15 AVC 10 MC 4 6 8 10 12 14 18 QUANTITY (Thousands of shirts per day) 2 18 20 In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the firm chooses to produce the quantity you already selected. Note: In the following question, enter a positive number, even if it represents a loss. The area of this rectangle indicates that the firm's would be $ thousand per day in the short run. PRICE (Dollars per shirt)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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