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    4 views3 pages

    Group3 Chap7 TQ#1

    Uploaded by

    Sly Lumba

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    SPECOMAN S14

    Chapter 7:
    Market Structure
    Perfect Competition
    Group3
    Fuentebella|Lumba|Manongdo
    Mendoza|Nery|Ngo
    Technical Question #1
    For each of the following graphs, identify the firm’s profit-maximizing (or loss-minimizing) output. Is
    each firm making a profit? If not, should the firm continue to produce in the short run?

    1 2 3

    losing money earning money losing money

    P > AVC continue to operate P > ATC continue to operate P < AVC shut down
    in the short run as long as P > AVC
    P > AVC
    shut down incur higher losses Losses lower than if
    equal to fixed costs continue to operate in
    short/long run
    Thank You

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