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    6 views2 pages

    Oligopoly: 1 Case I: Firm Can Survive As A Competitive Firm

    Uploaded by

    jsschuler

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Oligopoly

    Econ 212: Intermediate Microeconomics

    John S. Schuler
    November 16, 2019

    1 Case I: Firm Can Survive as a Competitive Firm


    Wherever the demand curve is above the average cost curve, D > AC, we can show that since D = P (Q) >
    AC, then P (Q) × Q > AC × Q implying that T R > T C. Therefore, profits exist where D lies above AC.

    D
    Price

    MC AC

    MR

    Quantity

    1
    D
    Price

    MC AC

    MR

    Quantity

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