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

Answered: Click on the point that represents a…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 29RQ: Why will firms in most markets be located at or close to the bottom of the long-run avenge cost me?

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