Question 4 1 point MC 8 4 WAV S2 10 20 30 40 Quantity per Da

Question 4 (1 point) MC 8 $4 WAV S2 10 20 30 40 Quantity per Day The graph above represents a firm in a perfectly competitive industry. If the market price is $5, does this firm earn a profit or a loss in the short run? profit loss Not enough information to determine the answer

Ans

It is quite simple. The firm makes profits because price is greater than ATC in equilbrium

Question 4 (1 point) MC 8 $4 WAV S2 10 20 30 40 Quantity per Day The graph above represents a firm in a perfectly competitive industry. If the market price is

Question 4 1 point MC 8 4 WAV S2 10 20 30 40 Quantity per Da

Solution

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