aADan ana2ATCAVCQPer the above graph of cost curves, assume that the horizontal lines at P1, P2, P3and P4 represent Demand MR Price which means the graph is of a firmproducing products in a perfectly competitive market structure. If so, and theproduct price is P3,O the firm should exit the industrythe firm will earn an economic profit.the firm is at breakeven earning normal profit which is an economic cost, but notearning any economic profit.new firms will enter the industry.Sim

Under a perfectly competitive market structure, firms are price takers and individual firms have…

OLY an NO ATC AVC Per the above graph of cost curves, assume that the horizontal lines at P1, P2, P3 and P4 represent Demand MR Price which means the graph is of a firm producing products in a perfectly competitive market structure. If so, and the product price is P3, the firm should exit the industry the firm will earn an economic profit. the firm is at breakeven earning normal profit which is an economic cost, but not earning any economic profit. new firms will enter the industry.

OLY an NO ATC AVC Per the above graph of cost curves, assume that the horizontal lines at P1, P2, P3 and P4 represent Demand MR Price which means the graph is of a firm producing products in a perfectly competitive market structure. If so, and the product price is P3, the firm should exit the industry the firm will earn an economic profit. the firm is at breakeven earning normal profit which is an economic cost, but not earning any economic profit. new firms will enter the industry.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 18P

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