Under what conditions will a purely competitive firm realize an economic profit? Give a response from a marginal revenue and marginal cost perspective and from a total revenue and total cost perspective
What will be an ideal response?
From an MC–MR perspective, the firm will realize an economic profit if price exceeds average total cost. It will experience economic losses if average total cost exceeds price. From a TC–TR perspective, the firm will realize an economic profit if TR exceeds TC. It will experience economic losses if TC exceeds TR.
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Using Figure 8.5, if the equilibrium price level is P1, then aggregate demand is
A. AD2, and the equilibrium output level is Q2. B. AD2, and the equilibrium output level is Q1. C. AD1, and the equilibrium output level is Q2. D. AD1, and the equilibrium output level is Q3.
At any point on an indifference curve, the slope of the curve measures the consumer's
a. elasticity of demand. b. income. c. willingness to trade one good for the other. d. perception of the two goods as substitutes or complements.
If the ________ curve is relatively more unstable than the ________ curve, an interest rate target is preferred
A) IS; IS B) IS; LM C) LM; IS D) LM; LM
Property rights
A) only need to be found in wealthy segments of the population. B) need to be universal. C) do not promote incentives. D) do not promote efficiency