8. Problems and Applications Q8 Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=70-Q Marginal Revenue: MR = 70-20 Marginal Cost: MC=10+ Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. 80 70 00 50 40 30 20 10 0 -10 20 -30 40 -40 40 -70 -40 10 20 30 40 Quantity (Units) 60 60 70 10 Demand MR 0 MC * Proft-Maximization ?
8. Problems and Applications Q8 Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=70-Q Marginal Revenue: MR = 70-20 Marginal Cost: MC=10+ Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. 80 70 00 50 40 30 20 10 0 -10 20 -30 40 -40 40 -70 -40 10 20 30 40 Quantity (Units) 60 60 70 10 Demand MR 0 MC * Proft-Maximization ?
Chapter9: Perfect Competition
Section9.2: Perfect Competition In The Short Run
Problem 3ST
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