MC ATC MR 0 4 812 16 20 24 Quantihy ithousands of boxes per day) Taste. Inc. pro

Question

MC ATC MR 0 4 812 16 20 24 Quantihy ithousands of boxes per day) Taste. Inc. produces organic breakfast cereals. The market for breakfast cereals is monopolistically competitive. The Egure above shows the tically competitive. The figure above shows the demand curve that Fresh Taste faces (D) the company's marginal revenue curve (MR), its marginal cost curve (MC), and its average total cost curve (áTC). Fresh $8.000 per day. 516.000 per day zezo, that is, it earns an accounting profit None of the above answers is corzect

Explanation / Answer

Answer
The firm produces at MR=MC
where
Q=8000 units and the price is found from demand curve at the output level which is P=$3
and ATC=$3 from ATC curve at the output level
Profit=(P-ATC)*Q
=(3-3)*8000
=0
the profit is zero which means it earns accounting profit.
option third

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