-The Above Figure Shows the Cost Curves of a Profit-Maximizing

question 470

Essay

-The above figure shows the cost curves of a profit-maximizing perfectly competitive firm. If the price equals $7
a) how much will the firm produce?
b) how much is the firm's average total, average variable, and marginal costs?
c) how much is the firm's total, total variable, and total fixed costs?
d) how much is the firm's total revenue and economic profit?
e) what will happen in this market in the long run?

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Definitions:

Return Ratio

A financial metric used to measure the efficiency or profitability of an investment, calculated by dividing the gain (or loss) from the investment by its cost.

Total Assets

The sum of all assets owned by an entity, including both current and long-term assets, representing the total value of what the entity owns.

Profitability

The ability of a firm to earn income.

Days' Sales

A financial metric that compares a company's average receivables to its average daily sales, indicating how fast the company collects payments from customers.