Relationship betwe Choice A Suppose there's an appliance store that produces and sells air conditioners. It could set its price high and sell very few air conditioners, or it could set its price low and sell lots of air conditioners. The following table shows some possible choices this store could make for its annual production. BUDE Price $600 450 300 150 0 60 54 marginal DOLLARS (Thousands of dollars per year) 48 42 The following graph plots the firm's "total revenue" curve: that is, the relationship between quantity and total revenue given by the two right columns in the previous table. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. 36 30 24 18 12 6 A 0 40 B 80 Quantity 0 80 160 240 320 X C Aa Aa Total Revenue E 120 160 200 240 280 320 OUTPUT (A/C units sold per year] Total Revenue $0 36,000 48,000 36,000 0
Relationship betwe Choice A Suppose there's an appliance store that produces and sells air conditioners. It could set its price high and sell very few air conditioners, or it could set its price low and sell lots of air conditioners. The following table shows some possible choices this store could make for its annual production. BUDE Price $600 450 300 150 0 60 54 marginal DOLLARS (Thousands of dollars per year) 48 42 The following graph plots the firm's "total revenue" curve: that is, the relationship between quantity and total revenue given by the two right columns in the previous table. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. 36 30 24 18 12 6 A 0 40 B 80 Quantity 0 80 160 240 320 X C Aa Aa Total Revenue E 120 160 200 240 280 320 OUTPUT (A/C units sold per year] Total Revenue $0 36,000 48,000 36,000 0
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 11RQ: What is die difference between accounting and economic profit?
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