Answered: Refer to Figure 12-11. Suppose the…

Refer to Figure 12-11. Suppose the prevailing price is $20 and the firm is currently producing 1,350 units. In the long-run equilibrium, the firm represented in the diagram

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Price
and
cost
MC
ATC
AVC
20
MR
15
14
11
750
1,100 1,350
1,800
Quantity
Refer to Figure 12-11. Suppose the prevailing price is $20 and the
firm is currently producing 1,350 units. In the long-run equilibrium,
the firm represented in the diagram
will continue to produce the same quantity.
O will cease to exist.
O will reduce its output to 1,100 units.
O will reduce its output to 750 units.

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