Price (dollars per unit) Quantity demanded (units) 26 0 24 1 22 2 20 3 18 4 16 5
ID: 1177427 • Letter: P
Question
Price
(dollars per unit)
Quantity demanded
(units)
26
0
24
1
22
2
20
3
18
4
16
5
14
6
12
7
10
8
Quantity produced
(units)
Average total cost
(dollars)
Marginal cost
(dollars)
0
1
18.00
8.00
2
12.00
6.00
3
10.66
8.00
4
10.50
10.00
5
11.20
14.00
6
12.66
20.00
7
15.14
30.00
8
23.25
80.00
1What is the profit-maximizing level of output and price?
2What amount of profit is the firm earning?
3 Is this firm in a short-run or long-run equilibrium? Why?
Price
(dollars per unit)
Quantity demanded
(units)
26
0
24
1
22
2
20
3
18
4
16
5
14
6
12
7
10
8
Explanation / Answer
p qd TR MR QS AC TC MC 26 0 - - - - - - 24 1 24 24 1 18 18 8 22 2 44 20 2 24 24 6 20 3 60 16 3 32 32 8 18 4 72 12 4 42 42 10 16 5 80 8 5 56 56 14 14 6 84 4 6 76 76 20 12 7 84 0 7 106 106 30 10 8 80 4 8 186 186 80 ANSWER #1 Profit maximization output is 4 units and price is $18. because marginality condition is fullfilled here (MR=MC OR MR is greater than MC #2 Profit = TR-TC = 72-42 = $30 #3 It%u2019s a short run equilibrium because there is fixed cost which is $8
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.