Figure 9-5
Figure 9-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 9-5.If the market price is $20,what is the average profit at the profit-maximizing quantity?

Question

Figure 9-5
  Figure 9-5 shows cost and demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
-Refer to Figure 9-5.If the market price is $20,what is the average profit at the profit-maximizing quantity?

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 total cost is $15, the average profit is $5.

Figure 9-5 Figure 9-5 Shows Cost and Demand Curves Facing