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The relationship between the firm's average variable, average total, and marginal cost curves above: Marginal Reveue = Price = US $ 2.50 ;   a) Use the graph to find the Firm's profit-maximizing output.  b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business?  c) Will other firms with costs the same as Firms enter the market? Explain.

The relationship between the firm's average variable, average total, and marginal cost curves above: Marginal Reveue = Price = US $ 2.50 ;   a) Use the graph to find the Firm's profit-maximizing output.  b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business?  c) Will other firms with costs the same as Firms enter the market? Explain.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The relationship between the firm's average variable, average total, and marginal cost curves above:

Marginal Reveue = Price = US $ 2.50 ;  

a) Use the graph to find the Firm's profit-maximizing output. 

b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business? 

c) Will other firms with costs the same as Firms enter the market? Explain. 

 

5.50 5.00 4.50 4.00 MC 3.50 3.00 2.50 ΑTC 2.00 AVC 1.50 1.00 0.50 100 200 300 400 500 600 Quantity (gallons per day) Price and costs (dollars)
Transcribed Image Text:5.50 5.00 4.50 4.00 MC 3.50 3.00 2.50 ΑTC 2.00 AVC 1.50 1.00 0.50 100 200 300 400 500 600 Quantity (gallons per day) Price and costs (dollars)
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