Consider a perfectly competitive market for shirts. The following graph shows th

Question

Consider a perfectly competitive market for shirts. The following graph shows the daily cost curves of a firm operating in this market In the Short run, at a market price of $ 18 per shirt, this firm will choose to produce shirts per day On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $18 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse cover the shaded region on the graph to see its area. The area of this rectangle indicates that the firm would have of per day. For each in price in the following table, Calculate the firm's optimal quantity of units produced and determine the profit or loss if it produces at that quantiy. Use the data from the previous graph to identify its total variable cost. Assume a that if the firm is indifferent between producing and shutting down, It will produce

Explanation / Answer

Answer to blank 1: 36,000

Answer to blank 2: a profit

Answer to blank 3: $180000 ( i.e. ($18 - $13) * 36000)

Answer to blank 4: $6

P($) Q TR = P*Q TFC TVC PROFIT 6 12000 72000 108000 72000 - 108000 12 24000 288000 108000 192000 -12000 18 36000 648000 108,000 360000 180000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.