Exhibit 7-2 Cost per unit curves

-In Exhibit 7-2,if the price of the firm's product is $2.00 per unit,the firm will produce:

Question

Exhibit 7-2 Cost per unit curves
 
-In Exhibit 7-2,if the price of the firm's product is $2.00 per unit,the firm will produce:

Quizplus · Accepted Answer

Looking at the cost per unit curves, we can see that the total cost curve intersects the demand curve at a quantity of 15 units per day when the price is $2.00 per unit. This means that producing 15 units per day will maximize the firm's profit. Any quantity less than 15 will not fully utilize the fixed costs and result in higher average costs per unit, while any quantity greater than 15 will have higher marginal costs and decrease the firm's profit. Therefore, the best choice is to produce 15 units per day when the price is $2.00 per unit.

Exhibit 7-2 Cost Per Unit Curves