Economics Homework Help. Glendale Community College Competitive Industry and Firm Operating Exercises
The following graph illustrates a perfectly competitive industry and firm operating in a perfectly competitive market. The fixed costs for the firm are $478.80:
1) What quantity will the firm produce in order to maximize profits? Fully detail and explain why a firm would produce that specific quantity. In addition, why would the firm not produce a lower quantity or higher quantity. (Write a minimum of two sentences explaining your answers)
2) What is the exact economic profit for the firm at the profit maximizing quantity. (Type your calculations for full credit)
3) Explain why the firm chooses to operate, given their current economic profit. Explain when the firm would choose to shut down? (Write at least one paragraph explaining your answers for full credit)
