Suppose that the market for sports watches is a competitive market. The followin

Question

Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market 100 90 80 70 3 60 Proft or Loss 50 AVC 20 10 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of watches In the short run, at a market price of $80 per watch, this firm will choose to produce watches per day previous graph, use the blue rectangle (circle symbols) to shade the area nting the firm's profit or loss if the market price is $80 and the firm chooses to 0,000 the quantity you already selected 55,000 Note: In the following question, you should enter a posive number in the numeric entry field would be The area of this rectangle indicates that the firm's day per

Explanation / Answer

in the short run , at a market price of $80 per watch , this firm will choose to produce 55000 watches per day

where P=MC, output is determined

i can't shade the image but the shaded rectangle will be area above ATC and below price line at price=$80

the area of rectangle indicates that the firm's profit would be 1925000 per day

profit = (price-ATC)*quantity   = (80-45)*55000 = $1925000

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