The diagram above depicts overall market supply and demand on the left, and the cost curves for a representative firm supplying in that market on the right. At the current market price of $6, the firm:

The diagram above depicts overall market supply and demand on the left, and the cost curves for a representative firm supplying in that market on the right. At the current market price of $6, the firm:

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 6SQ

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Question

Market
Representative Firm
MC
ATC
b.
$8
AVC
$6
MR = P
D1
20,000
100
125
Quantity (Q)
Output (Q)
The diagram above depicts overall market supply and demand on the left, and the cost curves for a representative firm
supplying in that market on the right. At the current market price of $6, the firm:
is making a positive economic profit.
is making a negative economic profit (loss).
should shutdown.
is making neither a positive profit nor a negative profit. It is just breaking even.
Price
$$$

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