ezto.mheducation.com CHEM 6A - Ge Exam 2 https://tritoned.u ECON 1 -Principl Sma
ID: 1109554 • Letter: E
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ezto.mheducation.com CHEM 6A - Ge Exam 2 https://tritoned.u ECON 1 -Principl SmartBook CH06 EOC AmosWEB is How For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit maximizing level of output and how much profit will this producer earn if the price of pizza is $0.50 per slice? Instructions: In the graph below, label all three curves by double-clicking on the ??? to select the appropriate label. Enter your responses as whole numbers Cost Curves 3.50 3.25 3.00 2.75 250 2.25 MC ATC AVC D 1.78 1.25 0.75 0.25 0.00 100 200 300 40o 500 600 700 800 900 Quantity (slices/day) 300 slices per day When the price is $0.50 per slice, the profit-maximizing level of output is At the profit-maximizing level of output, the producers profit is: S-225 per day.Explanation / Answer
The output is 300 per day as it is where the MC curve connects with the MR curve which is a horizontal line with price=0.5
The profit will be 300x(0.5-1,25)=-225
I do not see anything wrong with the numbers that you have provided in the blank.
But, there can be a trick, the fixed cost is (1.25-0.75)x300=150 which is less than the 225 loss.
So, you may put 0 output as profit-maximizing output with profit of -150.
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