Question # 1 : On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves). Draw a First Graph: Now assume the market price, P, is such that it intersects the upward-sloping portion of MC above ATC. Graphically depict the short-run equilibrium q (representative firm's output) and π (representative firm's profit) under this price scenario. Draw a second graph: On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves). Now assume the market price, P, is such that it intersects the upward-sloping portion of MC between ATC and AVC. Graphically depict the short-run equilibrium q (representative firm's output) and π (representative firm's profit) under this price scenario. Draw a third Graph: On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves). Now assume the market price, P, is such that it intersects the upward sloping portion of MC below AVC. Graphically depict the short-run equilibrium q (representative firm's output) under this price scenario.
Question # 1 :
On a graph for a representative firm in a
Draw a First Graph:
Now assume the market
Draw a second graph:
On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves).
Now assume the market price, P, is such that it intersects the upward-sloping portion of MC between ATC and AVC. Graphically depict the short-run equilibrium q (representative firm's output) and π (representative firm's profit) under this price scenario.
Draw a third Graph:
On a graph for a representative firm in a perfectly competitive industry, depict the three cost curves AVC, ATC, and MC (assume typical U-shaped cost curves).
Now assume the market price, P, is such that it intersects the upward sloping portion of MC below AVC. Graphically depict the short-run equilibrium q (representative firm's output) under this price scenario.
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