Explore BrainMass
Share

Profit-maximizing or loss-minimizing output graphs

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

For each of the following graphs, identify the firm's profit-maximizing (or loss-minimizing) output. Is each firm making a profit? If not, should the firm continue to produce in the short run?
(See Attachment for Graphs)

© BrainMass Inc. brainmass.com October 10, 2019, 6:24 am ad1c9bdddf
https://brainmass.com/economics/pricing-output-decisions/profit-maximizing-or-loss-minimizing-output-graphs-542649

Solution Preview

All of these graphs show a perfectly competitive firm. Demand is perfectly elastic (horizontal), so Demand = Price = Marginal Revenue.
For all three graphs, the profit-maximizing or loss-minimizing output is the Quantity ...

Solution Summary

This solution shows how to identify the profit-maximizing or loss-minimizing output on a firm's revenue and cost graph. It also shows how to determine whether the firm should continue to produce or shut down in the short run.

\$2.19