Question

The graph illustrates an average total cost (ATC) curve (also sometimes called average cost), marginal cost (MC) curve, average variable cost (AVC) curve, and marginal revenue (MR) curve (which is also the market price) for a perfectly competitive firm that produces toy spaceships. Please answer the three questions, assuming that the firm is profit maximizing and does not shutdown in the short run.

What is the firm's total revenue?

$

What is the firm's total cost?

$

What is the firm's profit? (Enter a negative number for a loss.)

$

What is the firm's total revenue?

The graph wont go through but is on chegg when you type the question in. nobody has gotten it right though

Answer 1

Here is the graph, hopefully the one you wanted (even if it is not, you can learn the concept from here and make use):



From this we get to know that MC cuts MR from below at 260 units produced. Let us remember this and solve the questions below:

What is the firm's total cost?
At the production level of 260 units, we can see that ATC is $330. When we multiply the both we get = 260 x 330 = $85800
Total Cost = $85800

What is the firm's profit?
Profit = Total Revenue minus Total Cost
Total Revenue = 260 units x Price of 200 = $52000
Total cost = we already computed it above = $85800
Profit = $52000 minus $85800 = (-) $33800 (It's a loss)

What is the firm's total revenue
Total Revenue = 260 units x Price of 200 = $52000