Question

Question 26 5 pts Price ATC MC AVC DD . m 0 Quantity Refer to the diagram above. At the point markede, o price is determining production at a level where P = AVC o TR is exactly equal to TC, so profits equal zero. o price is above average cost of production. o the leftover rectangle is the profit earned.

Answer 1

Q26
Answer
Option 2
the firm produces at MC=P
where
Q=Qo and P=Po where P=ATC so the TR=TC and profit is zero.
===
Q28
Answer
Option 2
the firm produces at MR=MC
where
Q=H
and the firm charge price from the demand curve at the output level so P=D
ATC=B
Profit=(P-ATC)*Q
=(D-B)*H
=area BDEG