Econ 111: Principles of Economics - Accelerated Treatment - Quiz 4
1. Given all the information in the total product (TP) curve presented here, sketch the average and marginal product curves in the area directly underneath it.
2. Given all the information in the total cost (TC) curve presented here, sketch the average and marginal cost curves in the area directly underneath it.
3. The following graph gives information about the marginal cost (MC), average total cost (ATC) and average variable cost (AVC) for a perfectly competitive firm A that faces a market price p* for its product.
a) Show the output level that maximizes profits for firm A, and explain briefly (2-3 sentences) why you picked that quantity.
b) Answer with one sentence: Is the firm enjoying profits or losses at the equilibrium output level? WHY?