economics. answer only g,h 2. Answer the questions below using the cost curves for the price-taking firm shown inthe following graph:SMCATCAVC0100 200 300 400 500 600 700 800 900Outputa. If price is $7 per unit of output, draw the marginal revenue curve. The managershould produce units to maximize profit.b. Because average total cost is $for this output, total cost is $c. The firm makes a profit of $d. At.units, profit margin (or average profit) is maximized. Why is this outputlevel different from the answer to part a?e. Let price fall to $3, and draw the new marginal revenue curve. The manager shouldnow produceunits to maximize profit.f. Total revenue is now $and total cost is $The firm makes a loss of$g. Total variable cost is $„ leaving $to apply to fixed cost.k. If price falls below $the firm will produce zero output. Explain why.OOD7Price and cost (dollars)204042T

The total variable cost(TVC)is basically the amount of output multiplied by the variable expense per…

Answered: Answer questions below using the cost…

Answer questions below using the cost curves for the price-taking firm shown in the following graph: SMC ATC €0 A a 5 Price and cost (dallan) T AVC

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 39P: The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total...

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