Determine the profit-maximizing level of output and the associated profit-maximizing price. Use the grey rectangle (star symbols) to shade the area that represents the firm's total cost at this quantity. PRICE (Dollars per video game) 200 180 160 140 120 100 80 60 40 20 0 0 20 20 40 MR 60 80 100 120 140 160 180 200 QUANTITY (Thousands of Video games). D Total Cost video games) Evaluate the following statement: "If the firm chooses to follow the supply rule and produce where MR MC, demand is price elastic; so therefore, it is possible to increase profit by increasing output." That is correct. This is the exact reason that firms always operate on the price inelastic portion of the demand curve. O That is incorrect. Increasing output when demand is price elastic will only increase total revenue, not profit. O That is incorrect. In fact, firms should produce where MR is greater than MC to ensure that they earn positive profit. O That is correct. The profit maximum occurs where demand is unit elastic. 0 Grade It Now Save & Continue Continue without saving
Determine the profit-maximizing level of output and the associated profit-maximizing price. Use the grey rectangle (star symbols) to shade the area that represents the firm's total cost at this quantity. PRICE (Dollars per video game) 200 180 160 140 120 100 80 60 40 20 0 0 20 20 40 MR 60 80 100 120 140 160 180 200 QUANTITY (Thousands of Video games). D Total Cost video games) Evaluate the following statement: "If the firm chooses to follow the supply rule and produce where MR MC, demand is price elastic; so therefore, it is possible to increase profit by increasing output." That is correct. This is the exact reason that firms always operate on the price inelastic portion of the demand curve. O That is incorrect. Increasing output when demand is price elastic will only increase total revenue, not profit. O That is incorrect. In fact, firms should produce where MR is greater than MC to ensure that they earn positive profit. O That is correct. The profit maximum occurs where demand is unit elastic. 0 Grade It Now Save & Continue Continue without saving
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 9SQP
Related questions
Question
Suppose That Redeye's Game Emporium is in a market with imperfect competition. The graph shows the firms demand (D), marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves.
Solve all questions compulsory .....you will not solve all questions then I will give you down upvote ....and I want correct Answer pls......
Transcribed Image Text:Determine the profit-maximizing level of output and the associated profit-maximizing price. Use the grey rectangle (star symbols) to shade the area
that represents the firm's total cost at this quantity.
PRICE (Dollars per video game)
200
180
160
140
120
100
80
60
40
20
0
0
20
20
40
MR
60 80 100 120 140 160 180 200
QUANTITY (Thousands of Video games).
D
Total Cost
Transcribed Image Text:video games)
Evaluate the following statement: "If the firm chooses to follow the supply rule and produce where MR MC, demand is price elastic; so therefore, it
is possible to increase profit by increasing output."
That is correct. This is the exact reason that firms always operate on the price inelastic portion of the demand curve.
O That is incorrect. Increasing output when demand is price elastic will only increase total revenue, not profit.
O That is incorrect. In fact, firms should produce where MR is greater than MC to ensure that they earn positive profit.
O That is correct. The profit maximum occurs where demand is unit elastic.
0
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