Suppose that the market for sports watches is a competitive market. The following graph shows the daily cost curves of a firm operating in this market

In the short run, at a market price of $80 per watch, this firm will choose to produce 10000/30000/40000/55000watches per day.

On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $80 and the firm chooses to produce the quantity you already selected.

Note: In the following question, you should enter a positive number in the numeric entry field.

The area of this rectangle indicates that the firm?s profit /economic loss would be $ per day.

Transcribed Image Text:

PRICE (Dollars per watch) 100 90 80 70 40 30 20 10 0 0 MC ATC AVC 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of watches) Profit or Loss ? PRICE (Dollars per watch) 100 90 80 70 40 30 20 10 0 0 MC ATC AVC 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of watches) Profit or Loss ?

Answer rating: 100% (QA)

The market price is 80 The marginal cost is 80 when the quantity level is 550... View the full answer