The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P*) that the firm charges? P* = $ 55 per unit (b) What is the optimal amount of bread (Q*) that the firm produces? Q* = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit
The following graph shows the cost and revenue curves for J'Aime Bakery, which sells croissants in a perfectly competitive market. The marginal revenue (MR) curve is blue and a completely hotizontal line, the marginal cost (MC) curve is red and dips lowest/farthest left, and the average total cost (ATC) curve is green and does not dip as low as the marginal cost curve does. (NOTE: All vertical axis tick marks shown are multiples of 10. If a vertical value is not directly on a vertical tick, then it is exactly halfway between the one above and the one below.) 350 J'Aime Bakery - Cost & Revenue Curves $/Q 300- 250- 200- 150- 100- 50- 3 4 5 6 Quantity (Q) 8 9 10 ☑ Use the graph to answer the following questions about the firm's optimal (profit-maximizing) operations. (a) What is the optimal price (P*) that the firm charges? P* = $ 55 per unit (b) What is the optimal amount of bread (Q*) that the firm produces? Q* = 5 units (c) What is the firm's corresponding average total cost (ATC) per unit produced? ATC = $ per unit
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.6IP
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What is the firm’s corresponding average total cost (ATC) per unit produced?
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