The accompanying graph illustrates a perfectly competitive firm's total revenue (TR) curve and total cost (TC) curve. The firm produces lamps, so assume it can only produce whole units of lamps (e.g., it can produce 5 or 6 lamps but not 5.5 lamps). 20 19 max, profit TR 18 17 16 Move the maximum profit line by adjusting its endpoints to 15 14 TC represent the maximum profit the firm can possibly earn. 13 12 11 10 When the firm is producing 4 lamps, profit is 8. 7 when the firm is producing 9 lamps. 6 4 When the firm is producing 2 lamps, profit is 3 when the firm is producing 8 lamps. greater than 1 2 3 4 6 7 8 9 10 Quantity less than the same as Price

The accompanying graph illustrates a perfectly competitive firm's total revenue (TR) curve and total cost (TC) curve. The firm produces lamps, so assume it can only produce whole units of lamps (e.g., it can produce 5 or 6 lamps but not 5.5 lamps). 20 19 max, profit TR 18 17 16 Move the maximum profit line by adjusting its endpoints to 15 14 TC represent the maximum profit the firm can possibly earn. 13 12 11 10 When the firm is producing 4 lamps, profit is 8. 7 when the firm is producing 9 lamps. 6 4 When the firm is producing 2 lamps, profit is 3 when the firm is producing 8 lamps. greater than 1 2 3 4 6 7 8 9 10 Quantity less than the same as Price

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 7PA

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