Christopher \'Spain Filr Homer Insert DesignLayxt References Mailings Review iew

Question

Christopher 'Spain Filr Homer Insert DesignLayxt References Mailings Review iew Tell me what you want to do PROTECTED VIFW Re caref files frerm the Internet can cnntain vises Iniles ynu neerd to edit, it's safer to stay in Proterted View Fnable Fditirg 7. The followinggraph shows a pertectly competitive tirm in equilibrium. At a price of $40, what are tlis firtn's profit maximizing oulput, profit, lolal cos, lolal variable cosl, and total fixed cost? Show your calculations ol the profit, total cost, total variable costs. and total fixed cost. AVC 18 1200 Pege 3 of 4 261 ords + 100% 633 PM O Type here to search

Explanation / Answer

Answer

The firm is in the perfectly competitive market so the firm produces at MC=P
in this case MC=P at Q=900 units
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Total fixed cost=AFC*Q
AFC=ATC-AVC
TC=$30 and VC=$22
AFC=30-22=8
FC=8*900=$7200
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TVC=VC*Q=22*900=$19800
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TC=ATC*Q=30*900=$27000

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Profit=TR-TC
TR=P*Q
=40*900=36000
Profit=36000-27000
=$900
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Profit=$9000
Total cost=$27000
Total variable cost=$19200
Total fixed cost=$7200
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