pling Learnin The graph illustrates an average total cost (ATC) curve (also some
ID: 1122322 • Letter: P
Question
pling Learnin The graph illustrates an average total cost (ATC) curve (also sometimes called average cost), marginal cost (MC) curve, average variable cost (AVC) curve, and marginal revenue (MR) curve (which is also the market s inorganic coffee beans. Please answer the following three s, assuming that the firm is proftit maxilmizing and does not shutdown in the short run. 1. What is the firm's total revenue? Price, Cost MC ATC $300 AVC 2. What is the firm's total cost? Number $150 3. What is the firm's profit? (Enter a negative number for a loss.) 205 260 336 365Explanation / Answer
Answer 1 - According to the given information and graph we have calculated firm's total revenue. We know that total revenue is equal to price time quantity. In the graph P = MC at output level 260 units. The price is $200. Thus total revenue TR = 260*200
TR = $52,000
Answer 2 - Total cost of the firm is ,
TC = ATC * Q
TC = 320 * 260
TC = $83,200
Answer 3 - Profit = total revenue - total cost
Profit = 52,000 - 83200
Profit = - $31,200
This firm is suffering from loss ( $31200)
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