Question
In: Economics
The graph below shows a particular firm's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves
The graph below shows a particular firm's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves, where the market is competitive. Suppose that a new management team is brought in and that this team is initially less concerned about maximizing profits than it is simply about making a profit. What range of production quantities will allow the firm to operate while earning a profit?
Give your answer by dragging the Qmin to Qmax lines into their correct positions. The output will need to lie somewhere betwen those limits.
To refer to the graphing tutorial for this question type, please click here.
Solutions
Expert Solution
Profit can be earned when MR =
P > ATC
Between Qmin and Qmax shown in the graph above P > = ATC and the firm is earning a profit.
Rahul Sunny answered 2 years agoRelated Solutions
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Using a marginal cost (MC), average variable costs (AVC), and
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The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows
the weekly marginal cost (MC) and average total cost (ATC) for
Smitten, a perfectly competitive firm that produces children’s
mittens in a competitive market.
Smitten's
Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
8. The table below shows the weekly marginal cost (MC) and average total cost (ATC) for...
8. The table below shows the weekly marginal cost (MC) and
average total cost (ATC) for Buddies, a perfectly competitive firm
that produces novelty ear buds in a competitive market. The market
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Quantity of Ear buds
MC ($)
ATC ($)
5
-
9
10
2
5.5
15
2.44
4.48
20
3.56
4.25
25
4.5
4.3
30
5.02
4.42
35
5.96
4.64
40
8.56
5.13
Instructions: In part a, enter your answer as...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows the weekly marginal cost (MC) and average
total cost (ATC) for Smitten, a perfectly competitive firm that
produces children’s mittens in a competitive market.
Smitten's Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows the weekly marginal cost (MC) and average
total cost (ATC) for Smitten, a perfectly competitive firm that
produces children’s mittens in a competitive market.
Smitten's Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
10
$1.60
$5.00
15
2.00
4.00
20
2.45
3.61
25
3.55
3.60
30
4.00
3.67
35
5.50
3.93
40
6.00
4.19
45
8.50
4.67
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
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10. The vertical axis measures the revenue and cost in dollars per
unit, from 0 to $25, increasing by $5. The graph shows two U-shaped
curves, labeled MC and ATC. The minimum point of the ATC curve
corresponds to an output of 30 and a cost of...
Pickup (Q) Price/Pickup Total Revenue (TR) Marginal Revenue (MR) Total Cost (TC) Marginal Cost (MC) Average...
Pickup (Q) Price/Pickup Total Revenue (TR) Marginal Revenue
(MR) Total Cost (TC) Marginal Cost (MC) Average Total Cost
(ATC)
0 $4.20 0 --- $3.20 --- ---
1 $3.80 $4.20
2 $3.40 $5.60
3 $3.00 $7.80
4 $2.60 $10.40
5 $2.20 $13.40
6 $1.90 $16.80
Complete the table above, then answer the following
questions
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QUESTION SIX
6.1 Using marginal cost (MC), marginal revenue (MR), average cost
(AC) curves in an appropriate diagram, illustrate and explain how a
firm can make abnormal profits.
My subject is ECONOMICS
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