Lauren grows grapes. Her average variable cost (AVC), average total cost (ATC), and marginal cost (MC) of production are illustrated in the figure to the right. Assume the market for grapes is perfectly competitive and that the market price is $2.00 per crate. Characterize Lauren's economic profits. Assume she produces such that she maximizes profits in the short run. Using the rectangle drawing tool, shade in Lauren's economic profits. Attach the correct label to indicate whether she is earning a profit (Profit) or incurring a loss (Loss). Carefully follow the instructions above, and only draw the required object.

Lauren grows grapes. Her average variable cost (AVC), average total cost (ATC), and marginal cost (MC) of production are illustrated in the figure to the right. Assume the market for grapes is perfectly competitive and that the market price is $2.00 per crate. Characterize Lauren's economic profits. Assume she produces such that she maximizes profits in the short run. Using the rectangle drawing tool, shade in Lauren's economic profits. Attach the correct label to indicate whether she is earning a profit (Profit) or incurring a loss (Loss). Carefully follow the instructions above, and only draw the required object.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section9.2: Perfect Competition In The Short Run

Problem 3ST

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