The graph below summarizes the demand and costs for a firm that operates in a perfectly competitive market. Instructions: Use the nearest whole numbers on the graph when calculating numerical responses below. " A graph summarizes the demand and costs for a firm that operates in a perfectly competitive market.""The horizontal axis labeled quantity ranges from 0 to 11 in increments of 1. The vertical axis labeled dollar ranges from 0 to 48 in increments of 4. A horizontal line labeled D-superscript f = M R enters the quadrant through the point (0, 28). An upward-facing curve labeled M C begins at the point (0.5, 20) goes down to the right with decreasing steepness to a low point at (3.5, 8) then goes up to the right with increasing steepness to end at the point (8, 40). A second upward-facing curve labeled A V C begins at the point (0.5, 22) goes down to the right with decreasing steepness to a low point at (5, 12) then goes up to the right with increasing steepness to end at the point (10.5, 26). A third upward-facing curve labeled A F C begins at the point (3, 42) goes down to the right with decreasing steepness to end at the point (11, 12). A fourth upward-facing curve labeled A T C begins at the point (4, 44) goes down to the right with decreasing steepness to a low point at (7.5, 32) then goes up to the right with increasing steepness to end at the point (10.5, 38). The curve M C intersects the curve A V C at (5, 12), the curve A F C at (6, 20), the line D-superscript f = M R at (7, 28), the curve A T C at (7.5, 32). The curve A V C intersects the curve A F C at (8, 16). The curve A F C intersects the line D-superscript f = M R at (4.5, 28). All values are approximated. " a. What level of output should this firm produce in the short run? units b. What price should this firm charge in the short run? $ c. What is the firm’s total cost at this level of output? $ d. What is the firm’s total variable cost at this level of output? $ e. What is the firm’s fixed cost at this level of output? $ f. What is the firm’s profit if it produces this level of output? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ g. What is the firm’s profit if it shuts down? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ h. In the short run, should this firm continue to operate or shut down?

The graph below summarizes the demand and costs for a firm that operates in a perfectly competitive market. Instructions: Use the nearest whole numbers on the graph when calculating numerical responses below. " A graph summarizes the demand and costs for a firm that operates in a perfectly competitive market.""The horizontal axis labeled quantity ranges from 0 to 11 in increments of 1. The vertical axis labeled dollar ranges from 0 to 48 in increments of 4. A horizontal line labeled D-superscript f = M R enters the quadrant through the point (0, 28). An upward-facing curve labeled M C begins at the point (0.5, 20) goes down to the right with decreasing steepness to a low point at (3.5, 8) then goes up to the right with increasing steepness to end at the point (8, 40). A second upward-facing curve labeled A V C begins at the point (0.5, 22) goes down to the right with decreasing steepness to a low point at (5, 12) then goes up to the right with increasing steepness to end at the point (10.5, 26). A third upward-facing curve labeled A F C begins at the point (3, 42) goes down to the right with decreasing steepness to end at the point (11, 12). A fourth upward-facing curve labeled A T C begins at the point (4, 44) goes down to the right with decreasing steepness to a low point at (7.5, 32) then goes up to the right with increasing steepness to end at the point (10.5, 38). The curve M C intersects the curve A V C at (5, 12), the curve A F C at (6, 20), the line D-superscript f = M R at (7, 28), the curve A T C at (7.5, 32). The curve A V C intersects the curve A F C at (8, 16). The curve A F C intersects the line D-superscript f = M R at (4.5, 28). All values are approximated. " a. What level of output should this firm produce in the short run? units b. What price should this firm charge in the short run? $ c. What is the firm’s total cost at this level of output? $ d. What is the firm’s total variable cost at this level of output? $ e. What is the firm’s fixed cost at this level of output? $ f. What is the firm’s profit if it produces this level of output? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ g. What is the firm’s profit if it shuts down? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ h. In the short run, should this firm continue to operate or shut down?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 11E

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