For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.00 per slice? Price ($/slice)3.503.253.002.752.502.252.001.751.501.251.000.750.500.250MCATCQuantity (slices/day)AVC100 200 300 400 500 600 700 800 900Sample Answer-i2MO100 200 300 400 500 600 700 800 900Click to enlargeAt the profit-maximizing level of output, the producer's profit is: $ATCAVC100* per day.

In the given market, price is constant so it will be equal to marginal revenue. At profit…

Answered: For the pizza seller whose marginal,…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 1CQQ

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Question

For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is $1.00 per slice?

Price ($/slice)
3.50
3.25
3.00
2.75
2.50
2.25
2.00
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0
MC
ATC
Quantity (slices/day)
AVC
100 200 300 400 500 600 700 800 900
Sample Answer
-i
2
MO
100 200 300 400 500 600 700 800 900
Click to enlarge
At the profit-maximizing level of output, the producer's profit is: $
ATC
AVC
100
* per day.

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