(Solved): A perfectly competitive firm faces a price of 10 and is currently producing a level of output at whi ...
A perfectly competitive firm faces a price of 10 and is currently producing a level of output at which marginal cost is equal to 10 on a rising portion of its short-run marginal cost curve. Its long-run marginal cost is equal to 12 . Its short-run average variable cost is equal to 8 . The minimum point on its long-run average cost curve is equal to 50 In the short run, this firm is earning an economic loss in the short run and should reduce its level of operation. an economic profit in the short run, and should continue its level of operation. no economic profit or loss in the short run, and should continue its level of operation. no economic profit or loss in the short run, and should shat down. In the long run, this firm should lower output so that
P=LMC=SMC, because now
P=LMC=SMCP=SMC>AVCP=LMC=SMCP=SMC>AVCP=LMC=SMCP=5MC.P=5MC.
should lower output so that P=LMC=SMC, because now P=SMC>AVC.
should raise output so that P=LMC=SMC, because now P=SMC>AVC.
should raise output so that P=LMC=SMC, because now P=5MC.