The graph shows the marginal cost (MC), average total cost (ATC), and marginal revenue (MR) curves for a perfectly (or purely) competitive firm. Note that the demand (D) curve is the same as the MR curve for such a firm. Assume that the ATC cost curves are representative of other firms in the industry. Given the current price, this firm will D= MR MC earn zero economic profit. earn a negative economic profit. earn a positive economic profit. Quantity In the long run, this market will experience exit by some firms. experience entry of additional firms. MR/MC ($)

The graph shows the marginal cost (MC), average total cost (ATC), and marginal revenue (MR) curves for a perfectly (or purely) competitive firm. Note that the demand (D) curve is the same as the MR curve for such a firm. Assume that the ATC cost curves are representative of other firms in the industry. Given the current price, this firm will D= MR MC earn zero economic profit. earn a negative economic profit. earn a positive economic profit. Quantity In the long run, this market will experience exit by some firms. experience entry of additional firms. MR/MC ($)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 12P

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