Suppose that the market demand curve for your product is given by: Q=$25-0.5P. Assume that the marginal cost and average total cost equal $34 for all levels of production. The marginal revenue curve would be given by the equation: MR= (Carefully enter your response as an algebraic expression, using the proper notation in the proper format.) The adjacent figure shows the demand curve (D) and the marginal revenue curve (MR) for your product. Using the line drawing tool, plot the marginal cost (MC) and the average total cost (ATC) curves. Using the point drawing tool, show the profit-maximizing price and quantity for your firm. Carefully follow the instructions above and only draw the required objects. Economic profit earned by your firm will be equal to $ Price (dollars/unit) $60- $50- $40 $30- $20- $10- $0+ MR 12 Quantity (units) 16

Suppose that the market demand curve for your product is given by: Q=$25-0.5P. Assume that the marginal cost and average total cost equal $34 for all levels of production. The marginal revenue curve would be given by the equation: MR= (Carefully enter your response as an algebraic expression, using the proper notation in the proper format.) The adjacent figure shows the demand curve (D) and the marginal revenue curve (MR) for your product. Using the line drawing tool, plot the marginal cost (MC) and the average total cost (ATC) curves. Using the point drawing tool, show the profit-maximizing price and quantity for your firm. Carefully follow the instructions above and only draw the required objects. Economic profit earned by your firm will be equal to $ Price (dollars/unit) $60- $50- $40 $30- $20- $10- $0+ MR 12 Quantity (units) 16

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because of limited space and resources for production activity: To increase output, the firm must bring older, less-reliable equipment out of storage, pay its workers extra for overtime hours, and so on. If the firm is able to practice price discrimination, using the two prices indicated by the two points indicated on the demand curve, use the area tool to outline the region that represents the net revenue (revenue minus production costs, but ignoring fixed costs). The lower boundary of the region should be slanted. To refer to the graphing tutorial for this question type, please click here. Price MR MG D Quantity
The graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because of limited space and resources for production activity: To increase output, the firm must bring older, less-reliable equipment out of storage, pay its workers extra for overtime hours, and so on. If the firm is able to practice price discrimination, using the two prices indicated by the two points indicated on the demand curve, use the area tool to outline the region that represents the net revenue (revenue minus production costs, but ignoring fixed costs). The lower boundary of the region should be slanted. To refer to the graphing tutorial for this question type, please click here. Price MR MC AVC D Quantity