Question

The graph below shows a particular firm's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves, where the market is competitive. Suppose that a new management team is brought in and that this team is initially less concerned about maximizing profits than it is simply about making a profit. What range of production quantities will allow the firm to operate while earning a profit?

Give your answer by dragging the Qmin to Qmax lines into their correct positions. The output will need to lie somewhere betwen those limits.
 
To refer to the graphing tutorial for this question type, please click here.

Answer 1

Profit can be earned when MR = P > ATC

Between Qmin and Qmax shown in the graph above P > = ATC and the firm is earning a profit.

Answer 2