4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 40 36 Profit or Loss 32 28 24 20 ATC 16 12 AVC MC 8 10 12 14 16 18 20 QUANTITY (Thousands of candles) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area of this rectangle indicates that the firm's would be S per day. PRICE (Dollars per candle)

4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. 40 36 Profit or Loss 32 28 24 20 ATC 16 12 AVC MC 8 10 12 14 16 18 20 QUANTITY (Thousands of candles) In the short run, at a market price of $20 per candle, this firm will choose to produce candles per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area of this rectangle indicates that the firm's would be S per day. PRICE (Dollars per candle)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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