Question

Consider a perfectly competitive market for frylng pans. The following graph shows the dally cost curves of a firm operating in this market. PRICE AND COST (Dollars per pan 20 Profit or Loss 16 ATC 12 AVC 10 20 30 450 60 OUTPUT IThousands of pans per day) Help Clear All In the short run, at a market price of $8 per pan, this firm will choose to produce pans 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 $8 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse over the shaded region on the graph to see its area, The area of this rectangle indicates that the firm would have of per day For each price in the following table, calculate the firm's optimal quantity of units produced and determine the profit or loss if it produces at that quantity, Use the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Note: You can mouse over the purple points (diamond symbols] on the previous graph to see precise information on average variable cost.) Total RevenueFixed Cost Price (Dollars per pan) Profit Output (Pans per day) (Dollars per day) (Dollars per day) Variable Cost (Dollars per day) (Dollars per day)

Answer 1

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