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 $20
1 32
2 37
3 48
4 61
5 75
6 92
7 113
8 136
Suppose the current equilibrium price in the teapot market is $10. 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).
Veronica will produce 2 teapots per day. She will charge the market price of $10. She will make a profit of $-17 (a loss of $17).
You might also like to view...
For a monopoly, a negative marginal revenue implies:
A. the price effect is larger than the quantity effect. B. total revenues are increasing. C. that the demand is price elastic. D. the quantity effect is larger than the price effect.
The Sherman Act was the first established antitrust law.
Answer the following statement true (T) or false (F)
The largest component of GDP is
a. tax revenue b. government purchases of goods and services c. the nation's capital stock d. private investment spending e. private consumption expenditures
Relatively high interest rates in the United States contributes to a strong U.S. dollar (less dollars per another currency) and this may lead to a deficit on the U.S. current account
Indicate whether the statement is true or false