Suppose that the market price in a perfectly competitive industry is $50 per unit. 1.) Using the line drawing tool, draw the marginal revenue line given this price and label your line MR. 2.) Using the rectangle drawing tool, draw a rectangle showing the area of profit or loss of the firm and label it P/L. Carefully follow the instructions above, and only draw the required objects. Price, ATC, MC ($) Q 100- 90- MC 80- ATC 巳 70- AVC 60- 50- 40- 30- 20- 10- 0+ Quantity (per month) AFC

Suppose that the market price in a perfectly competitive industry is $50 per unit. 1.) Using the line drawing tool, draw the marginal revenue line given this price and label your line MR. 2.) Using the rectangle drawing tool, draw a rectangle showing the area of profit or loss of the firm and label it P/L. Carefully follow the instructions above, and only draw the required objects. Price, ATC, MC ($) Q 100- 90- MC 80- ATC 巳 70- AVC 60- 50- 40- 30- 20- 10- 0+ Quantity (per month) AFC

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 6E

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Similar questions

Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
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