Refer to Figure 13-15 to answer the following questions
a. What is the profit-maximizing output level?
b. What is the profit-maximizing price?
c. What is the average total cost at the profit-maximizing output level?
d. What area represents the firm's profit?
e. At which output level are economies of scale exhausted?
f. Does this graph most likely represent the long run or the short run? Why?
a. The profit maximizing level of output is Q4.
b. The profit-maximizing price is P4.
c. The ATC at the profit-maximizing output level is P2.
d. The firm's profit is represented by area P2P4ed.
e. Economies of scale are exhausted at output Q3.
f. Since the graph displays a profit, it most likely represents the short run.
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