Price and Cost MC ATC AVC $40 $30 $28 $20 $12 500 600 700 1000 Quantity 1. If the market price is $40, what is the firm's total revenues? $20,000 $24,000 $28,000 $40,000 а. b. с. d. 2. If the market price is $40, what is the firm's profit? $ 6,000 $ 7,000 $10,000 $14,000 а. b. с. d.

Price and Cost MC ATC AVC $40 $30 $28 $20 $12 500 600 700 1000 Quantity 1. If the market price is $40, what is the firm's total revenues? $20,000 $24,000 $28,000 $40,000 а. b. с. d. 2. If the market price is $40, what is the firm's profit? $ 6,000 $ 7,000 $10,000 $14,000 а. b. с. d.

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 7PA

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

Price
and
Cost
MC
ATC AVC
$40
$30
$28-
$20
$12
500 600 700 1000
Quantity
1.
If the market price is $40, what is the firm's total revenues?
$20,000
$24,000
$28,000
$40,000
а.
b.
с.
d.
2.
If the market price is $40, what is the firm's profit?
$ 6,000
$ 7,000
$10,000
$14,000
а.
b.
с.
d.

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