Figure 2: Short-run unit cost curves P MC ATC 15 AVC 12 11 9 8 5...

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Figure 2: Short-run unit cost curves P MC ATC 15 AVC 12 11 9 8 5 5 8 10 13 17 d) (3 points) At a market price of $11, what is the firms short run profit max- imizing output? e) (3 points) At a market pr

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Answer 1

Answer #1

d) the firm maximizes profit by producing at P =MC

Thus at price level of 11, quantity = 13 units

e) at P= 11, the firm is earning zero economic profit as P=ATC at profit maximizing let of output

f) the market is in long run equilibrium when P=ATC, that is when firms earn zero economic profit.

Thus at P=11, firm is in long run equilibrium

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Answer 2

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Figure 2: Short-run unit cost curves P MC ATC 15 AVC 12 11 9 8 5...

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