Homework Answers
A.
7 quantity.
Explanation:
in perfect competition, firm maximizes its profit where MR equals MC. in perfect competition Price=MR. so here at quantity 7 Price=MR=MC. so at quantity 7 firm will maximizes profit.
B.
Profit=$21.
explanation:
at profit maximization quantity AVC is $4.
profit=Total Revenue- Total cost.
=49-28
=$21.
TR=Price *quantity
=$7*7
=$49
TC=ATC*Q
=$4*7
=$28
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