In a competitive market individual price does not influence the market. Hence it is a horizontal line. Price remains equal to marginal revenue and average revenue. In short run to maximise profit firm chooses that unit to produce where price is equal to marginal cost. Hence the condition is
It is given thatmarket price id $20 then we can say that firm will produce 9 candels at point C. It is shown in the following diagram:
Now
At market price $20 TR= 20*9=$180
On the other hand at this price average total cost is $16 and hence total cost would be
Therfore
Hence per day proft be $36
It is shown in the following digram:
4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive...
4. Profit maximization in the cost-curve diagramSuppose that the market for black sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. In the short run, at a market price of $15 per sweater, this firm will choose to produce ________ sweaters per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $15 and the...
4. Short-run profit maximization or loss minimization for a perfectly competitive firm Suppose that the market for cashmere sweaters is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. Profit or Loss PRICE AND COST (Dollars per sweater) 0 10 90 100 20 30 40 50 60 70 80 QUANTITY OF OUTPUT (Sweaters) In the short run, at a market price of $80 per sweater, this firm will choose to...
4. Profit maximization in the cost-curve diagram Suppose that the market for polo shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. In the short run, at a market price of $15 per shirt, this firm will choose to produce _______ shirts per day. On the preceding graph, use the blue rectangle (circle...
4. Profit maximization in the cost-curve diagram Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.In the short run, at a market price of $45 per sweater, this firm will choose to produce _______ sweaters per day. On the preceding graph, use the blue rectangle (circle...
CENGAGE MINDTAP Homework (Ch 14) 4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market, The following graph shows the daly cost curves of a firm operating in this market Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point 35 Proi or Loss ATC AVC MC 0 10 12 20 14 12 QUANTITY (Thousands af candes per dayli In the short run,...
4. Profit maximization in the cost-curve diagramSuppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.In the short run, at a market price of $20 per wind chime, this firm will choose to produce wind chimes per day.On the preceding graph, use the blue rectangle...
4. Profit maximization in the cost-curve diagram Aa Aa Consider a perfectly competitive market for teddy bears. The following graph shows the daily cost curves of a firm operating in this market. PRICE (Dollars per bear) 20 Profit or Loss MC 16 ATC 12 AVC 8 4 010 20 30 40 50 60 OUTPUT (Thousands of bears) Help Clear ALL In the short run, at a market price of $18 per bear, this firm will choose to produce bears per...
Suppose that the market for dress shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market Profit or Loss PRICE Dolars per shit) QUANTITY (Thousands of shirts) PRICE (DC 4 6 8 10 12 QUANTITY (Thousands of shirts) In the short run, at a market price of $15 per shirt, this firm will choose to produce shirts per day. On the previous graph, use the blue rectangle (circle symbols)...
Suppose that the market for blenders is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. In the short run, at a market price of $50 per blender, this firm will choose to produce _______ blenders per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing the...
Suppose that the market for cashmere sweaters is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. In the short run, at a market price of $45 per sweater, this firm will choose to produce _______ sweaters per day. On the preceding graph, use the blue rectangle (circle symbols) to shade the area representing...