What is the firm’s corresponding average total cost (ATC) per unit produced? The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectlycompetitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC)curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as themarginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directlyon a vertical tick, then it is exactly halfway between the one above and the one below.)J'Aime Bakery - Cost & Revenue Curves350300-01$250-200-150-100-50-☑3456Quantity (Q)7 8 910Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations.(a) What is the optimal price (P*) that the firm charges?P* = $ 55 per unit(b) What is the optimal amount of bread (Q*) that the firm produces?Q* = 5 units(c) What is the firm's corresponding average total cost (ATC) per unit produced?ATC = $ per unit(d) What is the resulting total revenue (TR) that the firm brings in?TR = $275(e) What is the firm's corresponding total cost (TC) of production?TC = $☐(f) What is the firm's resulting profit (TT)?(Hint: Don't forget the negative sign if the firm is losing money!)TT = $

A perfectly competitive market is a market structure that consists of many small firms and many…

The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P*) that the firm charges? P* = $ 55 per unit (b) What is the optimal amount of bread (Q*) that the firm produces? Q* = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit

The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P) that the firm charges? P = $ 55 per unit (b) What is the optimal amount of bread (Q) that the firm produces? Q = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit

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

What is the firm’s corresponding average total cost (ATC) per unit produced?

The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly
competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC)
curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the
marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly
on a vertical tick, then it is exactly halfway between the one above and the one below.)
J'Aime Bakery - Cost & Revenue Curves
350
300-
01$
250-
200-
150-
100-
50-
☑
3456
Quantity (Q)
7 8 9
10
Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations.
(a) What is the optimal price (P*) that the firm charges?
P* = $ 55 per unit
(b) What is the optimal amount of bread (Q*) that the firm produces?
Q* = 5 units
(c) What is the firm's corresponding average total cost (ATC) per unit produced?
ATC = $ per unit
(d) What is the resulting total revenue (TR) that the firm brings in?
TR = $275
(e) What is the firm's corresponding total cost (TC) of production?
TC = $☐
(f) What is the firm's resulting profit (TT)?
(Hint: Don't forget the negative sign if the firm is losing money!)
TT = $

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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