The short-run marginal and average cost curves for a firm are displayed below. When q = q 5, the marginal cost is $3. When q = 5, the average cost is $5. Assume the firm has a fixed cost of $5 and they can sell each unit of output at a price of $3 (p = 3). What is the profit- maximizing level of output for the firm in the short-run? Profit maximizing q = = 2 and
The short-run marginal and average cost curves for a firm are displayed below. When q = q 5, the marginal cost is $3. When q = 5, the average cost is $5. Assume the firm has a fixed cost of $5 and they can sell each unit of output at a price of $3 (p = 3). What is the profit- maximizing level of output for the firm in the short-run? Profit maximizing q = = 2 and
Chapter22: Supply: The Costs Of Doing Business
Section: Chapter Questions
Problem 10E
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The short-run marginal and average cost curves for a firm are displayed below. When q = 2 and
q = 5, the marginal cost is $3. When q 5, the average cost is $5. Assume the firm has a fixed
cost of $5 and they can sell each unit of output at a price of $3 (p = 3). What is the profit-
maximizing level of output for the firm in the short-run?
Profit maximizing q
=
LA
$
5
3
2
5
MC
AC
q](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F716074da-d2fe-4d46-b8ed-3c89634ff1a6%2Ff0876b02-6a47-4121-8bc7-a0e3865378c7%2Fm7pa3a_processed.png&w=3840&q=75)
Transcribed Image Text:=
The short-run marginal and average cost curves for a firm are displayed below. When q = 2 and
q = 5, the marginal cost is $3. When q 5, the average cost is $5. Assume the firm has a fixed
cost of $5 and they can sell each unit of output at a price of $3 (p = 3). What is the profit-
maximizing level of output for the firm in the short-run?
Profit maximizing q
=
LA
$
5
3
2
5
MC
AC
q
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