Figure 7.5 Figure 7.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 7.5.If the market price is $20,the average profit at the profit-maximising quantity is -.

Question

Figure 7.5  Figure 7.5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 7.5.If the market price is $20,the average profit at the profit-maximising quantity is -.

Quizplus · Accepted Answer

The average profit is calculated as the difference between the market price and the average total cost at the profit-maximizing quantity. If the market price is $20 and the average profit is $5, it implies that the average total cost is $15.

Figure 75 Figure 7