The firm will maximize its profit at a quantity of After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ units. in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is $ How will the situation change over time? per unit for this output. Losses will induce firms to leave this market until the profit maximizing price falls to zero. Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. This market is already in long-run equilibrium, and will not change throughout time. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity.

The firm will maximize its profit at a quantity of After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ units. in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is $ How will the situation change over time? per unit for this output. Losses will induce firms to leave this market until the profit maximizing price falls to zero. Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. This market is already in long-run equilibrium, and will not change throughout time. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.1P

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