The diagram shows a price-taking bakery's marginal and average cost curves, and its isoprofit curves. The current market price for bread is P*= 2.50. Which of the followingstatements is correct?8Price, P (€); cost43.702.50200Select one:20406080 100 120 140Quantity of loaves, Q160 180O a. The bakery is a price setter and sets its price as 2.50.b. The bakery maximises its profits by supplying 160 loaves.O c. The bakery's profit is 200.Marginal costcurveIsoprofit curve:€200Isoprofit curve:€80Firm's demandcurveZero-economic-profit curve(AC curve)200O d. The bakery's profit decreases until the quantity is 120, and then increases.e. The marginal cost curve is the bakery's supply curve.

Perfect competition is a market where there are many sellers and buyers and the sellers are…

The diagram shows a price-taking bakery's marginal and average cost curves, and its isoprofit curves. The current market price for bread is P*= 2.50. Which of the followin statements is correct? Price, P (€); cost 4 3.70 2.50 2 0 0 Select one: 20 40 Marginal cost curve 60 Isoprofit curve: €200 Isoprofit curve: €80 Firm's demand curve Zero-economic- profit curve (AC curve) 80 100 120 140 160 180 200 Quantity of loaves, Q O a. The bakery is a price setter and sets its price as 2.50. O b. The bakery maximises its profits by supplying 160 loaves. c. The bakery's profit is 200. Od. The bakery's profit decreases until the quantity is 120, and then increases. O e. The marginal cost curve is the bakery's supply curve.

The diagram shows a price-taking bakery's marginal and average cost curves, and its isoprofit curves. The current market price for bread is P*= 2.50. Which of the followin statements is correct? Price, P (€); cost 4 3.70 2.50 2 0 0 Select one: 20 40 Marginal cost curve 60 Isoprofit curve: €200 Isoprofit curve: €80 Firm's demand curve Zero-economic- profit curve (AC curve) 80 100 120 140 160 180 200 Quantity of loaves, Q O a. The bakery is a price setter and sets its price as 2.50. O b. The bakery maximises its profits by supplying 160 loaves. c. The bakery's profit is 200. Od. The bakery's profit decreases until the quantity is 120, and then increases. O e. The marginal cost curve is the bakery's supply curve.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter10: The Firm And The Industry Under Perfect Competition

Section: Chapter Questions

Problem 4TY

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The figure shows a bakery's marginal and average cost curves, and its isoprofit curves. The bakery is a price-taker in a large bread market. Suppose the current market price is P₁. Based on this information, which of the following statements is correct? Price, Cost €6 (5 20 40 60 80 Quantity MC hoprofits AC 100 120 140 160 180 number of loaves Select one or more: a. The bakery would be better off raising its price up to its AC level. O b. The bakery would be minimising its loss at A. Oc. If the bakery is not yet in the market then it would not enter the market. d. If the bakery is already in the market, then it would always immediately exit the market because it is making a loss.
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