Attempts2. Profit maximization of a seller in a competitive price-searchermarketConsider Unico Doughnut, a doughnut shop in a competitive price-searcher market. The following graph shows its demand curve, marginal revenue(MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Assume that the shop is operating in the short run.Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. If the shop is making a profit, use the greenrectangle (triangle symbols) to shade in the area representing its profit. If the shop is suffering a loss, use the purple rectangle (diamond symbols) toshade in the area representing its loss.4.00(nuчßno3.503.002.50Q SearchProfit Maximizing OutcomeProfit CENGAGE MINDTAPHomeworkPRICE (Dollars per doughnut)4.003.503.002.502.001.501.00 +0.500MC00.51.5ATCII1MR1.02.02.53.0QUANTITY (Thousands of doughnuts)Q Search3.5Demand4.0At the profit-maximizing output and price, the shop's profit is equal toGiven the profit-maximizing choice of output and price, there are+Profit Maximizing OutcomeProfitLoss20(Hint: Be sure to enter a minus sign if profit is negative.)shops in the industry than there would be in long-run equilibrium.www.pQ Search this courseX

Price searcher firm is a monopolistically competitive firm that maximises profit at MR=MC.

Homework PRICE (Dollars per doughnut) 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 MC 0 0.5 1.5 ATC 1 1 Q Search I I 11 MR 1.0 2.5 3.0 2.0 QUANTITY (Thousands of doughnuts) 3.5 Demand 4.0 At the profit-maximizing output and price, the shop's profit is equal to S Given the profit-maximizing choice of output and price, there are Profit Maximizing Outcome ww Profit Loss (Hint: Be sure to enter a minus sign if profit is negative.) shops in the industry than there would be in long-run equilibrium. www.p

Homework PRICE (Dollars per doughnut) 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 MC 0 0.5 1.5 ATC 1 1 Q Search I I 11 MR 1.0 2.5 3.0 2.0 QUANTITY (Thousands of doughnuts) 3.5 Demand 4.0 At the profit-maximizing output and price, the shop's profit is equal to S Given the profit-maximizing choice of output and price, there are Profit Maximizing Outcome ww Profit Loss (Hint: Be sure to enter a minus sign if profit is negative.) shops in the industry than there would be in long-run equilibrium. www.p

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 4CQQ

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