Figure: A Perfectly Competitive Firm in the Short Run ATC $490 $450 $300 $225 205 260 339 365 Referencer Ret 12-11 (Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run

Economics Dec 12, 2020

Figure: A Perfectly Competitive Firm in the Short Run ATC $490 $450 $300 $225 205 260 339 365 Referencer Ret 12-11 (Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run. If the market price is $300, the firm's total economic profit is: O $50, 850 O $42.900 none of the above - $78,000 0 - $50.700

Expert Solution

Explanation :

Firm maximises it's profit where MR equals MC. In perfect competition price is equals to MR. Because price is above average variable cost, firm will produce to minimise losses. Here at quantity 260 MR equals MC.

Profit =(Price - ATC) *quantity

=(300-495)*260

=-50,700

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote