Use the graph for a perfectly competitive firm to answer questions 1 through 10.

Question

Use the graph for a perfectly competitive firm to answer questions 1 through 10. If price = $10, the profit-maximizing/loss-minimizing level of output (Q) is (1) .total revenue is equal to (2) $,total cost is equal to (3) $. and the firm has a loss equal to (4) $. If this firm does not produce in the short run, it will have a loss equal to (5) $. If price = $6.50 and the firm produces 60 units of output, total revenue will be equal to (6) $. total cost will be equal to (7) $. and the firm will experience a loss equal to (8) $. If this firm does not produce in the short run, it will experience a loss equal to (9) $ because it must pay its (10) costs. fixed/variable.

Explanation / Answer

1. q = 100

2.TR = price * quantity = 10 * 100 =1000

3.total cost =13 * 100 =1300

4.loss =1300 -1000 =300

5. fixed cost per unit * quantity =5 * 100 =500

6.TR = price * quantity = 6.50 * 60 = 390

7.total cost = ATC * Q = 16 * 60 = 960

8.loss = TR -TC = 390 -960 = -570

9.Loss = 5 * 6 0= 300

10 fixed.

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