1. Exhibit 8-2 Total cost and total revenue for a firm in a perfectly competitiv
ID: 1181174 • Letter: 1
Question
1. Exhibit 8-2
Total cost and total revenue for a firm in a
perfectly competitive wool blanket market
Cost
Demand
Q
TC
Q
TR
0
$30
0
$0
1
33
1
10
2
37
2
20
3
42
3
30
4
51
4
40
5
60
5
50
6
90
6
60
Given the information in Exhibit 8-2, what is the profit-maximizing (or loss-minimizing) quantity?
1 27 10
2 24 17
3 21 25
4 18 40
5 15 60
Given the table above, ath the profit-maximizing output, the firm is earning
Total cost and total revenue for a firm in a
perfectly competitive wool blanket market
Cost
Demand
Q
TC
Q
TR
0
$30
0
$0
1
33
1
10
2
37
2
20
3
42
3
30
4
51
4
40
5
60
5
50
6
90
6
60
Explanation / Answer
1. Profit = TR-TC
Here the company is making loss
Loss is minimum when Q = 3
At Q=3, Loss =30-42 = -12
3.
4.Profit = P*Q -Tc
Profit is maximized when Q= 3
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