At its current level of production a profit-maximizing firm in a competitive market receives $15 for each unit it produces, and faces an average cost of $10. At the market price of $15, the firm’s marginal cost curve crosses the marginal revenue curve at an output level of 1,000 units.
1. Draw a diagram that depicts the typical firm in this market.
So far I have two graphs. Market and Firm with the axis labeled as P & Q for market and p & q for firm. I have my demand and supply curve under market with my price of $15 going through the middle and going to my firm graph. Where I have MR=$15. And the quantity= 1,000. I drew my marginal curve and average total cost curve as well.
I'm not sure what Q would equal on my market graph. And not even sure if my graphs are right.
