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which shows the graph of a perfectly competitive firm in the short run. a) If the firm's demand curve is MR3, does the firm earn an economic profit or loss?  b) Which demand curve(s) indicate(s) the firm incurs a loss? c) which demand curve(s) indicate(s) the firm would shut down? d) Identify the firm's short-run supply curve.

which shows the graph of a perfectly competitive firm in the short run. a) If the firm's demand curve is MR3, does the firm earn an economic profit or loss?  b) Which demand curve(s) indicate(s) the firm incurs a loss? c) which demand curve(s) indicate(s) the firm would shut down? d) Identify the firm's short-run supply curve.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider Exhibit 7-11, which shows the graph of a perfectly competitive firm in the short run.

a) If the firm's demand curve is MR3, does the firm earn an economic profit or loss? 

b) Which demand curve(s) indicate(s) the firm incurs a loss?

c) which demand curve(s) indicate(s) the firm would shut down?

d) Identify the firm's short-run supply curve.

100 100 3. 4. 100 100 8. Consider Exhibit 7-11, which shows the grap perfectly competitive firm in the short run. a. If the firm's demand curve is MR,, does the earn an economic profit or loss? b. Which demand curve(s) indicate(s) the firm incurs a loss? Which demand curve(s) indicate(s) the firm would shut down? с. d. Identify the firm's short-run supply curve. EXHIBIT 7-11 A Perfectly Competitive Firm MC ATC AVC Price per MR3 unit (dollars) MR2 MR Quantity of output (units per hour) ©Cengage Learning®
Transcribed Image Text:100 100 3. 4. 100 100 8. Consider Exhibit 7-11, which shows the grap perfectly competitive firm in the short run. a. If the firm's demand curve is MR,, does the earn an economic profit or loss? b. Which demand curve(s) indicate(s) the firm incurs a loss? Which demand curve(s) indicate(s) the firm would shut down? с. d. Identify the firm's short-run supply curve. EXHIBIT 7-11 A Perfectly Competitive Firm MC ATC AVC Price per MR3 unit (dollars) MR2 MR Quantity of output (units per hour) ©Cengage Learning®
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