4. At price level $30, firm’s profit is: $________ IC AC AVC 40 31 20 10 4 10 20
ID: 1165862 • Letter: 4
Question
4. At price level $30, firm’s profit is: $________ IC AC AVC 40 31 20 10 4 10 20 30A 40 50 60 70 80 5 OUTPUT 34 79 the point whene 1. What is the competitive firm's profit maximization "Golden Rule" MRE 2. In the above, when market price is $40, the profit maximizing output is 3. At this optimal output level, the total revenue is: Sl0 and total cost is: S 1300, thus the maximized profit is: $ 4. At price level of $30, firm's profit is: $TR- 1200 -0*30 1500-It0o 5. At and below price level of s 30 firm starts making negative profit? 6. At price level of $10,firm's total revenue is: HOO TR 10x40 400 7. At price level ofs 2 firm will decide to shut-down the plant, and the shut-down output is: 5S 8.Atprice level of$40, when firm produces 34 units, firm's profit is: $ Tc-40#3 40 67 rea under AC where TR-TC TRE40 x34-13L0 13 0-180oExplanation / Answer
1. Golden rule of competitive firm's profit maximisation is where P=MC=MR.
2. When P= $40 , the profit maximising output is where P=MC i.e at 67 units.
3.At this optimal level , Total revenue = (40)(67)= $ 2680 . And at Q=67 units , AC = $31 per units , therefore, TC= (31)(67)= $ 2077. Profit = $(2680- 2077)= $ 603.
4. At P= $30 , Optimal quantity is where P=MC i.e Q=60 units. Total Revenue = $(30)(60)= $ 1800. At Q=60 units, AC=$30 , therefore, TC= $(30)(60) = $1800. Profit = $(1800-1800)= 0.
5. At and below price level of $30 , firms start making negative profit.
6. At price level of $10, Optimal quantity is Q=40 units . Total revenue = $(0)(40) = $400.
7. At price level of $22 , the firm will decide to shut down the plant because Price is equal to minimum of AVC and the shut down output is 55 units.
8. At price level of $40, when firm produces 34 units , Total revenue $(40)(34)= $1360. and TC = $(40)(34)= $1360 . Profit = 0.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.