How much will the firm produce in order to maximise profits at a price of £8 per unit and What will be its average cost of production at this output? ..................................................... (b) How much (supernormal) profit will it make and How much will the firm produce in order to maximise profits at a price of £5 per unit? . (c) Below what price would the firm shut down in the short run and Below what price would the firm shut down in the long run?
How much will the firm produce in order to maximise profits at a price of £8 per unit and What will be its average cost of production at this output? ..................................................... (b) How much (supernormal) profit will it make and How much will the firm produce in order to maximise profits at a price of £5 per unit? . (c) Below what price would the firm shut down in the short run and Below what price would the firm shut down in the long run?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
(a) How much will the firm produce in order to maximise profits at a
of £8 per unit and What will be its average cost of production at this output? .....................................................
(b) How much (supernormal) profit will it make and How much will the firm produce in order to maximise profits at a price
of £5 per unit? .
(c) Below what price would the firm shut down in the short run and Below what price would the firm shut down in the long run?
Transcribed Image Text:10. The following diagram shows the cost curves of a firm under perfect competition.
£
MC
12
11
10
AC
AVC
8.
7
6.
5
4
1
0 10
30
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100
Quantity
20
3.
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