10. The diagram shows the price, marginal cost and average cost curves facing a perfectly competitive firm in the short run. What is the firms profit maximising output in the short run? MC 20 Price AVC 60 80 100 Output per day a) 60 units b) 80 units c) 100 units d) 140 units Cost, price (Rand)
10. The diagram shows the price, marginal cost and average cost curves facing a perfectly competitive firm in the short run. What is the firms profit maximising output in the short run? MC 20 Price AVC 60 80 100 Output per day a) 60 units b) 80 units c) 100 units d) 140 units Cost, price (Rand)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:10. The diagram shows the price, marginal cost and average cost curves facing a perfectly
competitive firm in the short run. What is the firms profit maximising output in the short run?
MC
AC
Price
AVC
60
80
100
Output per day
a)
60 units
b)
80 units
c)
100 units
d)
140 units
11. In the long run,
--will---
--the industry so that the market supply curve shifts to
---------
the . .until prices----sufficiently to allow all firms to make a normal profit
a)
Existing firms, exit, right, drop
b)
New firms, enter, right, drop
c)
Existing firms, exit, left, rise
d)
New firms, enter, left, rise
(puen) apud s0n
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