Answer to Question #237551 in Economics for KEBEDE AJEME

Question

. Use the diagram below to answer the following questions. A) In order to maximize profits, the firm will produce ______ units (show the calculation or steps). B) Calculate the firm’s profit (or loss) at equilibrium point; be sure to show your work and label your answer as profit, loss, or break even. C) Calculate the Total Revenue, Total Cost and Profit at the breakeven point. D) How much is the shut-down price? E) Calculate TR, TC and Profit at the Shutdown point. Q 300 250 100  $ S D Q P AVCATC MC50

Answer 1

A) In order to maximize profits, the firm will produce the number of units Q,at which MR = MC.

B) The firm’s profit (or loss) at equilibrium point is:

TP = (P - ATC)×Q.

C) The Total Revenue is TR = P×Q, Total Cost is TC = FC + VC.

D) The shut-down price is P = AVC.

E) We have not enough data to calculate TR, TC and Profit at the Shutdown point.