Question

Score: 0.33 of 1 pt 5 of 20 (5 completo) HW Score: 21.67%, 4.33 of 20 Worked Problem Part 1 (static) Question Help The table provides data on a market demand schedule (top two rows) and a firm's average and marginal cost schedules (bottom four rows), 1. What is the firm's shutdown point? A firm will stop producing an output in the short run when the market price of the good is Price P (5) Quantity 24 20 16 12 8 4 3,000 4,000 5,000 6,000 7,000 8,000 ne Firm's output MC($) ATC($) AVC($) 2 3 units 4 5 6 unit units units units units 11.00 11.13 12.00 13.63 16.00 19.13 13.50 12.25 12.00 12.19 12.70 13.50 11.25 11.13 11.25 11.63 12.25 13.13 O A. equals MC OB. below minimum AVC O c. equals ATC D. below minimum ATC This firm's shutdown point is at a market price of $ per unit and its profit-maximizing output is units.

Answer 1

In a perfect competitive market the profit maximization occurs where the intersection of price and marginal cost occurs

In the short run shutdown point is the point where the market price is less than the average variable cost

From the given table it can be clearly seen that at price is equal to to $8 price is less than average variable cost

Shutdown point will be at market price of $8 and the profit maximization output is is 6200 units approx

Answer 1 - option D

Answer 2- price, $8

Answer 3 - profit maximization output, 6200 units