The figure below shows the cost curves of a firm in a competitive market. The firm always makes the choice to maximize its profit.

-Refer to the figure above.If the market price of the product is $3.25,the firm's profit maximizing output is ________ and the firm's maximum profit is ________.

Question

The figure below shows the cost curves of a firm in a competitive market. The firm always makes the choice to maximize its profit.
 
-Refer to the figure above.If the market price of the product is $3.25,the firm's profit maximizing output is ________ and the firm's maximum profit is ________.

Quizplus · Accepted Answer

At a market price of $3.25, the firm will produce where its marginal cost (MC) equals the market price to maximize profit. The graph or data provided (though not visible in this format) likely indicates that this occurs at an output level of 1,200 units. The maximum profit is calculated by taking the total revenue (price times quantity) minus total cost at that output level, which, based on the options provided, results in a profit of $1,200 for choice A.

The Figure Below Shows the Cost Curves of a Firm