Question

How do I calculate the Quantity and get to the answer ? I am lost

For the pizza seller whose ma $2.50 per slice? arginal, average variable, and average total cost curves are g level of output and how much profit will this producer earn if t shown in the graph below, what is the profit-maximizing level of output and how much profit will this producer earn if the price of pizza is Instructions: In the graph below, label all three curves by double-clicking on the ?to select the appropriate label. Then, indicate the profit-maximizing level of output Enter your response as a whole number Cost Curves a- 3.00 MC ATC AVC 250 225 E 200 22 1.75 a 12 .00 160 260 36 4b 5óo sbo 76 ad o Quantity (slices/day) reset At the profit-maximizing level of output, the producer's profit is: S per day

Answer 1

Answer : For given diagram at equilibrium condition, Price (P) = MC.

Given, P = $2.50 per slice.

So, at P = MC = $2.50 the quantity level is 550 slices. Therefore, the profit maximizing output level is 550 slices.

At 550 slices ATC is $1.60 per slice.

So, per slice profit = P - ATC = 2.50 - 1.60 = $0.90

Total profit = Per slice profit × Output = 0.90 × 550 = $495

Therefore, at profit maximizing output level producer's per day profit is $495.