In the short run, at a market price of $18 per bear, this firm will choose to pr
ID: 1092153 • Letter: I
Question
In the short run, at a market price of $18 per bear, this firm will choose to produce 36,000 bears per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $18 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse over the shaded region on the graph to see its area. The area of this rectangle indicates that the firm would have an economic loss of $16,000 per day. For each price in the following table, calculate the firm's optimal quantity of units produced and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce.Explanation / Answer
1. 36000
2. an economic profit, 180000
3.
Price Output TR TFC TVC Profit 6 12000 72000 108000 72000 -108000 12 24000 288000 108000 180000 0 18 36000 648000 108000 360000 180000