# Profit-maximizing or loss-minimizing output graphs

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)

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.

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