Use the graph below of a competitive firm's short-run cost curves to answer the following
question.

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Question

Use the graph below of a competitive firm's short-run cost curves to answer the followingquestion.

David · Accepted Answer

Answer to 2:
Product price is $35 
a. To maximize the profit the firm produces 500 units of output (the point where price 
equals marginal cost, refer the figure). Total revenue is $17500 (=price*quantity = 
35*500). Total cost is $12500 (= ATC*quantity = 25*500). The firm makes a profit of 
$5000 (= total revenue – total cost = $17500-$12500). 
b. Note :

Use the graph below of a competitive firm's short-run cost curves to answer the following question.

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