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© Macmillan Learning Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. How much is the firm making in profit? $ If the goal of your business is to maximize profit, what will your long term strategy be? The business will exit the market because it is unable to cover its average costs. Price($) 1 2 3 4 10 9 8 7 E 6 5 MR MC D ATC 0 0 10 20 30 40 50 60 70 80 90 100 Quantity

© Macmillan Learning Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. How much is the firm making in profit? $ If the goal of your business is to maximize profit, what will your long term strategy be? The business will exit the market because it is unable to cover its average costs. Price($) 1 2 3 4 10 9 8 7 E 6 5 MR MC D ATC 0 0 10 20 30 40 50 60 70 80 90 100 Quantity

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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© Macmillan Learning Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. How much is the firm making in profit? $ If the goal of your business is to maximize profit, what will your long term strategy be? The business will exit the market because it is unable to cover its average costs. Price($) 1 2 3 4 10 9 8 7 E 6 5 MR MC D ATC 0 0 10 20 30 40 50 60 70 80 90 100 Quantity
Transcribed Image Text:© Macmillan Learning Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. How much is the firm making in profit? $ If the goal of your business is to maximize profit, what will your long term strategy be? The business will exit the market because it is unable to cover its average costs. Price($) 1 2 3 4 10 9 8 7 E 6 5 MR MC D ATC 0 0 10 20 30 40 50 60 70 80 90 100 Quantity
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