The following figure shows the total cost and total revenue for a firm when it prices it products at $8 and $10. Price 0 с H F JG 1. total fixed costs are OA. 2. economic profits equal BH. 3. average cost equals DG divided by OG. 4. total cost is minimized at B. TC TRO (P=$10) TR1 (P=$8) Output When the firm is producing the profit-maximizing level of output at a price of $10:
The following figure shows the total cost and total revenue for a firm when it prices it products at $8 and $10. Price 0 с H F JG 1. total fixed costs are OA. 2. economic profits equal BH. 3. average cost equals DG divided by OG. 4. total cost is minimized at B. TC TRO (P=$10) TR1 (P=$8) Output When the firm is producing the profit-maximizing level of output at a price of $10:
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 4.7P
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