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Suppose Veronica Sells Teapots in the Perfectly Competitive Teapot Market

question 56

Essay

Suppose Veronica sells teapots in the perfectly competitive teapot market.Her output per day and her costs are as follows:
 Output per  Day  Total Cost 0$2013223734846157569271138136\begin{array}{|c|c|}\hline\text { Output per } & \\\text { Day }& \text { Total Cost } \\\hline 0 & \$ 20 \\\hline 1 & 32 \\\hline 2 & 37 \\\hline 3 & 48 \\\hline 4 & 61 \\\hline 5 & 75 \\\hline 6 & 92 \\\hline 7 & 113 \\\hline 8 & 136 \\\hline\end{array}
Suppose the current equilibrium price in the teapot market is $15.To maximize profit,how many teapots will Veronica produce,what price will she charge,and how much profit (or loss)will she make? Draw a graph to illustrate your answer.Your graph should include Veronica's demand,ATC,AVC,MC,and MR curves,the price she is charging,the quantity she is producing,and the area representing her profit (or loss).


Definitions:

Bond's Principal

The face value of a bond, which is the amount the issuer agrees to pay the bondholder at the time of maturity, excluding interest payments.

Redemption Date

The specific date at which a bond or other debt instrument can be repaid before its maturity.

Initial Public Offerings

The process by which a private company offers shares to the public in a new stock issuance to raise capital.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for regulating the securities industry and protecting investors.

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