$19 MC 1 15 AC 11 10 AVC 40 9 The above figure shows the cost...

Question

Question

$19 MC 1 15 AC 11 10 AVC 40 9 The above figure shows the cost curves for a competitive firm. If the market price is $10 per u

Answer 1

Answer #1

So as we know in the perfect competition market , equilibrium is where P = MC .

So if P = MC = $10 , so Total revenue = 10q

But at the same time we can see in the graph ,

ATC is also equal to 10 .

So TC = 10q

Profit = TR - TC

Profit = 10q - 10 q = 0

Hence (A) part is a correct answer

Answer 2

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