Homework Help Question & Answers

Question 23 (2 points) The graph below shows the average total cost and marginal cost curves...


Question 23 (2 points) The graph below shows the average total cost and marginal cost curves of a perfectly competitive firm.
3 N 1 0 0 4 5 6 7 8 9 10 11 12 13 14 Quantity Q=4 Q=8 O Q=10 O Q=12 Question 24 (2 points) Explain why the market demand curv
Question 23 (2 points) The graph below shows the average total cost and marginal cost curves of a perfectly competitive firm. If the market price is $7, what is the output level that maximizes the firm's profit? 12 11 10 MC ATC 9 8 Price $/Q S 4 3 2 0 1 2 3 6 7 8 9 10 11 12 13 14 15 16 Quantity Q23 Q=4
3 N 1 0 0 4 5 6 7 8 9 10 11 12 13 14 Quantity Q=4 Q=8 O Q=10 O Q=12 Question 24 (2 points) Explain why the market demand curve a firm faces in a perfectly competitive mark is horizontal even though the market demand curve is not horizontal.
0 0
Next > < Previous
ReportAnswer #1

In a perfectly competitive market to maximize profit, firms set marginal revenue equal to marginal cost (MR=MC). MR is the slope of the revenue curve, which is also equal to the demand curve (D) and price (P).

Here the price is $7, so when the horizontal line is drawn then this curve is said to be the MR curve and demand curve. Therefore, MR=MC gives the maximum profit output is 10 units. Option C is correct.

Know the answer?
Add Answer of:
Question 23 (2 points) The graph below shows the average total cost and marginal cost curves...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
Share Your Knowledge

Post an Article
Post an Answer
Post a Question with Answer

Self-promotion: Authors have the chance of a link back to their own personal blogs or social media profile pages.