Course: ECO 110

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Unit 4 Assignment »

Unit 4 Assignment

Unit 4 Assignment

Please submit the assignment to the Dropbox.

1. If the market price is $.30, what is the profit maximizing level of production ( label it Q_1 ) for the firm?  (estimate the quantity as closely  as you can using the graph. )
2. What is the total economic profit for the firm in this case? (in 1)
3. If the price changes to $.22 cents, what is the profit maximizing level of production in this case ? (label it Q_2 )
4. What is the total economic profit at at this point?  (in 2)  Will the firm cease to produce at this point?
5. If the price falls to $.12, what is the profit maximizing level of production? (label it Q_3 )
6. What is the total economic profit at this point?  (in 5)  Under what circumstances may the firm stay or not stay in business?