Question

100 90 1 2. BO 70 60 COST 50 40 30 20 10 D MR 25 35 45 50 1 60 55 OUTPUT Curve 1 should be labeled Curve 2 should be labeled Firms maximize profit where The profit maximizing price for the firm is while the profit maximizing output for the firm is (approximations are fine)

Answer 1

Q25)

Curve 1 : MC marginal cost

curve 2: ATC Average total cost

maximize profits where MR = MC

eqm P = 54

Q = 42

100 90 1 2 BO 70 60 COST 50 40 30 20-1 10 D MR 25 35 55 60 45 50 OUTPUT

Q27) option 3)

if additional worker is hired, it decreases Production if there are negative returns

Q26) option 4)

explicit costs are those costs which are paid out of pocket

Options 1, 2,3 are implicit, Opportunity costs