Click on the point that represents a long-run equilibrium.40MCATC9

Answered: Click on the point that represents a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Click on the point that represents a long-run equilibrium.
4
0
MC
ATC
9

Expert Solution

Step 1

When rates have fully matched manufacturing costs and the economy is operating at its full potential, a market is said to be in Long run equilibrium. An economy is operating at full capacity when this happens, and its actual GDP is equal to its potential GDP.

Average total cost (ATC) is calculated by dividing the entire cost by the total amount of output produced. The additional cost required by creating one more unit of output is known as the Marginal cost (MC).

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