answer Identifying a firm's loss Active Learning 3 Determine this firm's total loss assuming Costs, P...

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Answer 1

Answer #1

From the given diagram,

Equilibrium for the competitive firm is attained at the point where MR=MC.

Here, equilibrium price is P= $3 and equilibrium quantity Q=30 units.

Then, total revenue = P*Q = $3*30 = $90

Now, average total cost = $5, then, total cost = ATC*Q = $5*30 = $150

Then, firm's loss = total revenue - total cost = $90-$150 = $60

Answer 2

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