FIGURE 1 MC AVC FIGURE 1B. INDUSTRY Q FIGURE 1A. A FIRM a. Identify the profit maximizing level of output (q*) and the price in this market. b. Is the fim eaming economic profit/loss at profit-maximizing level of quantity (q*)? Also explain how you identify. (without explanation your answer will not be accepted). c. Should the firm continue to produce in the short run or leave the market? Support your answer with proper reasoning (answers without justification will not be accepted). d. Briefly explain what you expect will happen in the long run in this industry. In other words, what will happen with the fim's profit/loss in the long run?

FIGURE 1 MC AVC FIGURE 1B. INDUSTRY Q FIGURE 1A. A FIRM a. Identify the profit maximizing level of output (q) and the price in this market. b. Is the fim eaming economic profit/loss at profit-maximizing level of quantity (q)? Also explain how you identify. (without explanation your answer will not be accepted). c. Should the firm continue to produce in the short run or leave the market? Support your answer with proper reasoning (answers without justification will not be accepted). d. Briefly explain what you expect will happen in the long run in this industry. In other words, what will happen with the fim's profit/loss in the long run?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter10: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 15CQ

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Question

FIGURE 1
MC
AVC
FIGURE 1B. INDUSTRY
Q
FIGURE 1A. A FIRM
a. Identify the profit maximizing level of output (q*) and the price in this market.
b. Is the firm eaming economic profit/loss at profit-maximizing level of quantity (q*)? Also
explain how you identify. (without explanation your answer will not be accepted).
c. Should the firm continue to produce in the short run or leave the market? Support your
answer with proper reasoning (answers without justification will not be accepted).
d. Briefly explain what you expect will happen in the long run in this industry. In other
words, what will happen with the firm's profit/loss in the long run?

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