Question 3 of 11 Mapd Sapling Learning The graph below shows a perfectly (or pur
ID: 1103894 • Letter: Q
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Question 3 of 11 Mapd Sapling Learning The graph below shows a perfectly (or purely) competitive firm's blue total revenue (TR) curve and red total cost (TC) curve. The firm produces sneakers, so assume it can only produce whole units of sneakers (e.g, it can 5 or 6 sneakers, but not 5.5 sneakers). When the firm is producing 4 sneakers, profit is 20 when the firm is producing 9 sneakers. O greater than O lower than O the same as 15 17 16 15 14 13 12 When the firm is producing 2 sneakers, profit is 0 TC when the firm is producing 8 sneakers. O greater than lower than the same as How many sneakers should the fimm produce to maximize profits? Enter.your response to the nearest whole unit Quantty Number & View Sciullo, Check AnswerNext rchExplanation / Answer
When the firm is producing 4 sneakers, profit is the same as when the firm is producing 9 sneakers. This is because the Total Revenue is equal to Total Cost at both the points.
When the firm is producing 2 sneakers, profit is lower than when the firm is producing 8 sneakers.
The firm needs to produce 7 sneakers to maximize profit because only at this point is the gap between Total Revenue and Total Cost is maximum and Total Revenue is higher than Total Cost.
Quantity
Fixed Cost ($)
Variable Cost ($)
Total Cost ($)
Total Revenue ($)
Marginal Revenue ($)
Marginal Cost ($)
Profit (Total Revenue - Total Cost) ($)
10
100
36
136
1000
---
---
864
11
100
74
174
1100
100
38
926
12
100
145
245
1200
100
71
955
13
100
202
302
1300
100
57
998
14
100
300
400
1400
100
98
1000
15
100
435
535
1500
100
135
965
16
100
588
688
1600
100
153
912
17
100
774
874
1700
100
186
826
In perfectly competitive market the price charged by a firm is equal to the marginal revenue. Since, in the present case the marginal revenue is $100, so the price that will be charged by the firm for each hard drive will be $100.
To maximize profit the firm should produce 14 units of hard drive.
The maximum profit of the firm is $1000.
The lowest profit that the firm can earn is by producing 17 units of hard drive. The associated profit is $826.
The marginal revenue received from the 11th unit is $100.
The marginal cost of producing the 11th unit is $38.
Quantity
Fixed Cost ($)
Variable Cost ($)
Total Cost ($)
Total Revenue ($)
Marginal Revenue ($)
Marginal Cost ($)
Profit (Total Revenue - Total Cost) ($)
10
100
36
136
1000
---
---
864
11
100
74
174
1100
100
38
926
12
100
145
245
1200
100
71
955
13
100
202
302
1300
100
57
998
14
100
300
400
1400
100
98
1000
15
100
435
535
1500
100
135
965
16
100
588
688
1600
100
153
912
17
100
774
874
1700
100
186
826
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