Cost and demand conditions SA ATC MC AVC 15 13 d MR 4 3 6 9

Cost and demand conditions SA ATC MC AVC 15 13 d MR 4 3 6 9 12 16 17 q Bushels of wheat The figure above depicts cost curves for a representative firm in a perfectly competitive industry. (You can assume the cost curves pass exactly through the points marked.) The market price is $15. If this farmer is maximizing profits in the short-run, his total costs will be $90 O $11 O $132 $66

Solution

Equilibrium condition in perfect competitive firm-P=MC and MC intersects AC at its minimum.This is at quantity of 9 units.AC is 10 at this point.

TC=AC*Q

TC=9*10

TC=90

Answer-90