1 4.The following graph shows the price, marginal cost and average cost curves for a firm.RM/MC15ATC9AVCDD=MR7Quantity25104 150(Units)a)Identify the type of market structure the firm is operating in. Justify your answer.b)What is the profit maximizing price and output for this firm?c)Calculate the amount of profit or loss at the equilibrium point. State the type ofprofit.

The equilibrium occurs where the P=MC.

Answered: The following graph shows the price,…

The following graph shows the price, marginal cost and average cost curves for a t RM MC 15 ATC AVC DD=MR Quantity 25 104 150 (Units) 97 2.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 7.15P

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