story Bookmarks People window Help Econ 201 Pra Q Review chap x A Sun 4:36 PM 3
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Question
story Bookmarks People window Help Econ 201 Pra Q Review chap x A Sun 4:36 PM 3 If the firm is x y.edu/webappslassessmenttakellaunch.isp?course assessment d- 5387761 id 302859.1&content; jda 12741772 18stepmnul 1&course; QUESTION 12 answer the table the quantity 2 points Save Answer questions that follow. produced, the total revenue, and the total cost ofa frm operating in a perfectly competitive market. Refer ro this table to Quantity Revenue Total Cost $10 $15 $13 When profits are maximized, profits are equal to: O a. S5. O b. S10 O c. $3 d. $9. e. $2 QUESTION 13 2 points Refer to the accompanying table. A firm participating in a competitive market with these costs would break even if the price is Average Averag Price Fixed Cost Variable Cost $4 $3 $6 $1 $8 $0.50Explanation / Answer
(12) (e)
Profit = Total revenue - Total cost
Profit is maximum when quantity = 3 (Profit = $15 - $13 = $2).
(13) Break-even price = $6
In breakeven, Revenue = Total cost
Revenue = Total fixed cost + Total variable cost
P x Q = (AFC x Q) + (AVC x Q)
Dividing each side by Q, we get
P = AFC + AVC
This is satisfied when price = $6 (AFC = $1 and AVC = $5).
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