Question 1 please 1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in thelong run in the market (In other words, will other firms join the market or exit the market?)2) If ATC is above the MR=P=AR=D line is there a profit or a loss? What will happen in thelong run in the market (In other words, will other firms join the market or exit the market?)3) What rule do economists follow to determine the quantity that should be produced inorder to maximize profit?4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-runand the long-run? (Explained at the end of the video).5) If the profit maximizing quantity is 50, the average revenue (AR) is $6 and the averagetotal cost (ATC) is $5, what is the profit? (Reminder: profit = total revenue - total cost)

Average revenue (AR): - it is the per-unit revenue generated by selling goods or services which is…

Answered: 1) If ATC is below the MR=P=AR=D line…

1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in the long run in the market (In other words, will other firms join the market or exit the market?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Question 1 please

1) If ATC is below the MR=P=AR=D line is there a profit or a loss? What will happen in the
long run in the market (In other words, will other firms join the market or exit the market?)
2) If ATC is above the MR=P=AR=D line is there a profit or a loss? What will happen in the
long run in the market (In other words, will other firms join the market or exit the market?)
3) What rule do economists follow to determine the quantity that should be produced in
order to maximize profit?
4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-run
and the long-run? (Explained at the end of the video).
5) If the profit maximizing quantity is 50, the average revenue (AR) is $6 and the average
total cost (ATC) is $5, what is the profit? (Reminder: profit = total revenue - total cost)

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