Utilize the graph above, which illustrates average fixed costs, average variable costs, average total costs, and...

  

Transcribed Image Text:

Utilize the graph above, which illustrates average fixed costs, average variable costs, average total costs, and marginal costs of production for a firm in a perfectly competitive market, to answer the following question. If the price is Po what should the firm do? Cost 86429 18 16 14 12 10 8 6- 4 2 O A B IV III P=MR Po=MRo 02 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Quantity Utilize the graph above, which illustrates average fixed costs, average variable costs, average total costs, and marginal costs of production for a firm in a perfectly competitive market, to answer the following question. If the price is Po what should the firm do? Cost 86429 18 16 14 12 10 8 6- 4 2 O A B IV III P=MR Po=MRo 02 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Quantity

Answer rating: 100% (QA)

ANSWER The firm is earning an economic Profit of zeroThereforethe firm has no incentive to leave the ... View the full answer