00:01
So, here first if the market price is p4, the firm will maximize profits at a quantity q4.
00:24
This is because the firm maximizes its profit where mc is equal to p.
00:44
B, the firm is making a profit at a price of p4 and quantity q4 since the price is above the average total cost.
00:59
So, we know profit is equal to total revenue minus total cost.
01:09
So, that is equal to p minus atc multiplied by q.
01:15
Now, since p is greater than atc, so the resultant profit would be a positive value.
01:34
Thus, there will be a profit.
01:43
C, if the market price is p3, the firm will maximize profits at a quantity q3.
02:33
D, the firm is breaking even at a price of p3 and quantity q3 since the price is above the average total cost...