The graph below shows a perfectly (or purely) competitive firm?s blue total revenue (TR) curve and red total cost (TC) curve. The firm produces lams, so assume it can only produce whole units of lams (e.g., it can produce 5 or 6 lamps, but not 5.5 lamps).

a. When the firm is producing 4 lamps, profit is ______ when the firm is producing 9 lamps.

? Greater than

? Lower than

? The same as

b. When the firm is producing 2 lamps, profit is _______ when the firm is producing 8 lamps.

? Greater than

? Lower than

? The same as

c. How many lampx should the firm produce to maximize profits? Enter your response to the nearest whole unit.

Transcribed Image Text:

20 19 18 17 16 15 14 13 12 11 $ 10 9 8 7 6 5 4 3 2 1 2 3 4 5 Quantity 6 TR TC 7 8 9 10 20 19 18 17 16 15 14 13 12 11 $ 10 9 8 7 6 5 4 3 2 1 2 3 4 5 Quantity 6 TR TC 7 8 9 10

Answer rating: 100% (QA)

a When the firm is producing 4 lamps associated Profit TR TC 88 0 And when it produc... View the full answer