Q3. The graph below shows the costs and revenue curves for...

Q3.

The graph below shows the costs and revenue curves for Dollar-Daze, a typical profit-maximizing firm in a perfectly competitive market producing Good X. Answer the following questions based on the graph below.

a.Calculate the firm's fixed cost. Show your calculations. b.Identify the price and profit maximizing quantity of Good X for Dollar-Daze. c.Calculate the economic profit at the quantity identified in part (b). d.As the market for Good X moves into the long-run equilibrium, explain what will happen to the price of Good X and why. e.Assume the cross-price elasticity of demand between Good X and Good B is positive, what will happen to the quantity demanded of Good B given the change in the long-run price of Good X in part (d)?

Price, Cost ($) 26 21 20 144 198 0 4 6 8 MC 10 ATC AVC d = MR Quantity