Question

Consider a perfectly competitive market for shirts. The following graph shows the dally cost curves of a firm operating in this market. PRICE, COST (Dollars per shirt 20 Profit or Loss MC 16 ATC 12 AVC 6 12 18 24 30 36 QUANTITY OF OUTPUTIThousands of shirts per dayl Help Clear AIL In the short run, at a market price of $18 per shirt, this firm will choose to produce 27.00 shirts per day On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $18 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse over the shaded region on the graph to see its area The area of this rectangle indicates that the firm would havea profitof $135,000 per day On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $18 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse over the shaded region on the graph to see its area. The area of this rectangle indicates that the firm would havea profitof $135,000 per day. For each price in the following table, calculate the firm's optimal quantity of units produced and determine the profit or loss if it produces at that quantity. Use the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Note: You can mouse over the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) Price Quantity of (Dollars pr Output, Q Total RevenueFixed Cost shirt) Variable Cost Profit (Shirts) TR FC Vc TR- TC $6 $81,000 12 81,000 18 81,000 If a firm shuts down, it incurs its fixed costs (FC) in the short run. In this case, the fixed cost of the firm producing shirts is $81,000 per day. In other words, if it shuts down, the firm would suffer losses of $81,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-isper shirt.

Answer 1

98 22 DOO TR 00 o 8looo 13s000 81000 よ16000 1 2- 81000 よ?000。 o 13 u86000. 27000