Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 12, Problem 7P
To determine
(a)
P = MC, under
To determine
(b)
P =
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explain when the firm maximizes its profit under perfect competition? can I get a answer like another pic? small and simple without steps 
The diagram below, shows the cost structure for a firm in perfect competition.
Assume that the market price is £12.
What should the firm do in the short- and log run if the price falls to 10?
a. It should exit in the short run and also in the long run.
b. It should keep operating in the short run but exit in the long run.
c. It should keep operating both in the short- and the long run.
d. We need more information to decide such an important question.
What are the assumptions of perfect competition? What are the prospects for profitability in the short-run and long-run under perfect competition?
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