The following graph shows the average and marginal cost curves for Kandi Keynes, a perfectly competitive firm. ATC AVC 250 MC Tools 225 200 MR1 MR2 175 150 MR3 125 100 75 50 25 369 12 15 18 21 24 27 30 33 36 39 42 Output per period a. If the price is $150, draw in the marginal revenue curve, and label it MR1. Plot only the end points on the graph above. b. At this price, what are the break-even output(s), the profit-maximizing output, and the level of total profits at that output? Break-even output(s): and 30 profit-maximizing output: |for a total profit of $ Price/costs
The following graph shows the average and marginal cost curves for Kandi Keynes, a perfectly competitive firm. ATC AVC 250 MC Tools 225 200 MR1 MR2 175 150 MR3 125 100 75 50 25 369 12 15 18 21 24 27 30 33 36 39 42 Output per period a. If the price is $150, draw in the marginal revenue curve, and label it MR1. Plot only the end points on the graph above. b. At this price, what are the break-even output(s), the profit-maximizing output, and the level of total profits at that output? Break-even output(s): and 30 profit-maximizing output: |for a total profit of $ Price/costs
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please explain Part B
![The following graph shows the average and marginal cost curves for Kandi Keynes, a perfectly competitive firm.
ATC
AVC
250
MC
Tools
225
200
MR1
MR2
175
150
MR3
125
100
75
50
25
369 12 15 18 21 24 27 30 33 36 39 42
Output per period
a. If the price is $150, draw in the marginal revenue curve, and label it MR1. Plot only the end points on the graph above.
b. At this price, what are the break-even output(s), the profit-maximizing output, and the level of total profits at that output?
Break-even output(s):
and
30
profit-maximizing output:
for a total profit of $
c. Draw a marginal revenue curve, labelled MR2, which ensures that, at best, the firm breaks even. Plot only the end points on the
graph above.
d. What is the corresponding break-even price?
Break-even price: $
e. Draw a marginal revenue curve, labelled MR3. which ensures that, at best, the firm just remains in operation. Plot only the end points
on the graph above.
f. What is the corresponding shutdown price?
Shutdown price: $
Price/costs](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff53eb250-5103-433f-a882-915aa4d88212%2F552f6ecc-b7ba-4c6a-8f49-413299b970f5%2Fl9tj0rm_processed.png&w=3840&q=75)
Transcribed Image Text:The following graph shows the average and marginal cost curves for Kandi Keynes, a perfectly competitive firm.
ATC
AVC
250
MC
Tools
225
200
MR1
MR2
175
150
MR3
125
100
75
50
25
369 12 15 18 21 24 27 30 33 36 39 42
Output per period
a. If the price is $150, draw in the marginal revenue curve, and label it MR1. Plot only the end points on the graph above.
b. At this price, what are the break-even output(s), the profit-maximizing output, and the level of total profits at that output?
Break-even output(s):
and
30
profit-maximizing output:
for a total profit of $
c. Draw a marginal revenue curve, labelled MR2, which ensures that, at best, the firm breaks even. Plot only the end points on the
graph above.
d. What is the corresponding break-even price?
Break-even price: $
e. Draw a marginal revenue curve, labelled MR3. which ensures that, at best, the firm just remains in operation. Plot only the end points
on the graph above.
f. What is the corresponding shutdown price?
Shutdown price: $
Price/costs
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education