Rambutan is a fruit prized in Eastern Asia for its unique hairy look. Once peele
ID: 1095053 • Letter: R
Question
Rambutan is a fruit prized in Eastern Asia for its unique hairy look. Once peeled, it reveals a sweet, slightly sour grape like gummy tasting fruit. Below is a graph for a perfectly or (purely) competitive rambutan farmer. This firm is incurring In the long run, firms will this market. profit ; enter profit ; leave loss ; leave loss enter What is this firm's profit/loss (round to the nearest penny)? Number $ If the market price fell to $9.51, then... O this firm would be making an economic profit. this firm would be incurring a loss. This firm would be at its shut down price. this firm is making zero economic profit.Explanation / Answer
1. At the current Price of $12.11, the quantity supplied is 7 units and the average total cost (=10.11) is less than the price. Therefore, the firm is making a(n) (economic) profit. Since the market is lucrative, the firm's will enter the market in long-run.
2. Total revenue = Quantity multilied by the price = 7(12.11) = 84.77
Total cost = Quantity multilied by average total cost = 7(10.11) = 70.77
Profit = Total revenue - total cost = $84.77 - $70.77 = $14.00
3.
At the Price of $9.51, the quantity supplied is 5.4 units and the average total cost (=$9.51) is the same as price. Therefore, the firm is making no economic profit.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.