How much profit is the typical firm making?at what equilibrium price are all economic profits eliminated?how many firms will be producing frisbees at long term price? Suppose that the monthly market demand schedule for Frisbees is listed below:Price$8$7$6$5$4$3$2Quantity demanded1,0002,0008,000 16,000 32,000 64,000Suppose further that the marginal and average costs of Frisbee production for every competitRate of output100200300400500600Marginal cost$2.00$3.00$4.00$5.00$6.00$7.00Average total cost$2.00$2.50$3.00$3.50$4.00$4.50Finally, assume that the equilibrium market price is $4 per Frisbee.(a) Identify this firm's profit-maximizing rate of output.Instructions: Enter your response as a whole number.units of output(b) Draw the market demand curve.Prev9 of 9NextDELL

Profit refers to the excess revenue after deducting all the direct costs from the alternative…

Answered: Suppose that the monthly market demand…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 9PA

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Question

How much profit is the typical firm making?

at what equilibrium price are all economic profits eliminated?

how many firms will be producing frisbees at long term price?

Suppose that the monthly market demand schedule for Frisbees is listed below:
Price
$8
$7
$6
$5
$4
$3
$2
Quantity demanded
1,000
2,000
8,000 16,000 32,000 64,000
Suppose further that the marginal and average costs of Frisbee production for every competit
Rate of output
100
200
300
400
500
600
Marginal cost
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
Average total cost
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
Finally, assume that the equilibrium market price is $4 per Frisbee.
(a) Identify this firm's profit-maximizing rate of output.
Instructions: Enter your response as a whole number.
units of output
(b) Draw the market demand curve.
Prev
9 of 9
Next
DELL

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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