Below is a graph of price and cost curves for a perfectly competitive firm that explains the profit/loss states of three different price levels.       a. At what quantity and price the firm will maximise its profit and calculate the total revenue, cost and profit. b. At what quantity and price the firm will minimise its loss and calculate the total revenue, cost and minimum loss.  c. At what price the firm will decide to shut down firm and justify your answer

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Below is a graph of price and cost curves for a perfectly competitive firm that explains the profit/loss states of three different price levels.


 

 

 

a. At what quantity and price the firm will maximise its profit and calculate the total revenue, cost and profit.

b. At what quantity and price the firm will minimise its loss and calculate the total revenue, cost and minimum loss. 

c. At what price the firm will decide to shut down firm and justify your answer.


 

 
40
MC
ATC
35
30
P,
AVC
25
20
16
15
P2
12
10
10 20 30
45 50 60 70 80 90 100 110
Transcribed Image Text:40 MC ATC 35 30 P, AVC 25 20 16 15 P2 12 10 10 20 30 45 50 60 70 80 90 100 110
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