Cost (thousands of $1 3 4 5 6 7 8 9 10 Output (thousands of vehicles...

Question

Question

Answer 1

Answer #1

Option C is correct.

In perfectly competitive market

Price above the MC gives maximum profit.
The point where AC and MC are equal is a zero profit point or break-even point.
The price between AC and AVC loss to the firm but continues in the short run.
The point where MC and AVC are equal a shutdown point and after it shutdown zone.

Answer 2

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