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Using Graphs That Show ATC, AVC, MC, P and MR

question 75

Essay

Using graphs that show ATC, AVC, MC, P and MR, show the profit maximizing situation for a firm that is experiencing:
a. short-run economic profits greater than zero. What will happen in the long run?
b. short-run losses where P < ATC but P > AVC. What will happen in the long run?
c. losses where P < minimum AVC. What will happen in the short run?


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