The figure to the right illustrates the average total cost (ATC) and marginal co

Question

The figure to the right illustrates the average total cost (ATC) and marginal cost (MC) curves for an orange farmer in California. Assume the market for oranges is perfectly competitive 60.0 56.0 ATC 52 Suppose the market price of oranges is $10.00 per crate. Characterize the farmer's profit. 48.0 make a profit, experience losses,40.0 At a $10.00 price, the farmer will break even 36.0 g32.0 8 24.0 16.0 The orange farmer will make a profit if the price of oranges is above $per crate. (Enter your response as an integer.) 28 e 20 12.0 0.0 0 1 2 3 4 5 6 7 8 9 10 11 12 Oranges (crates in 100s)

Explanation / Answer

Answer
The perfectly competetive firm maximize profit at MC=P
it means the firm will produce Q=300 crates of oranges
profit=(P-ATC)*Q
P=10
ATC=23
The ATC>P so the firm making losses,
The firm make profit if the price is above minimum ATC
which is P>ATC=20
--------
experiance losses, $20

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