Top Posters
Since Sunday
6
o
5
5
b
4
s
3
j
3
b
3
m
3
K
3
g
3
L
3
w
3
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
msidhu msidhu
wrote...
Go to Answer
Posts: 133
Rep: 0 0
A year ago

Consider the total cost and revenue curves shown below, for two perfectly competitive firms, Firm A and Firm B.

Short description: Two graphs labeled firm A and firm B. Long description: In each graph, the horizontal axis represents the quantity and the vertical axis represents dollars. The first graph representing firm A shows two increasing S-shaped parallel curves representing TC and TVC and an increasing line representing TR. TVC and TR begin at the origin. TC begins at a point, a little above the origin on the vertical axis. The second graph representing firm B shows two increasing S-shaped parallel curves representing TC and TVC and an increasing line representing TR. TVC and TR begin at the origin. TC begins at a point, a little above the origin on the vertical axis. TR intersects TC and TVC at two points, each.

FIGURE 9-5

Refer to Figure 9-5. If both Firms A and B are producing a level of output such that the slope of the TC curve is equal to the slope of the TR curve,



▸ then the ATC is at a minimum and both firms are maximizing profits.

▸ then both firms are earning positive economic profits because the distance between TR and TC is the greatest.

▸ then both firms are suffering losses because the distance between TR and TC is the smallest.

▸ then MC = MR, but both firms may not be maximizing their profits.

▸ then MC = MR and both firms are maximizing profit (or minimizing losses).
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
Read 40 times
1 Reply
Replies
Answer verified by a subject expert
drdaviddrdavid
wrote...
#1
Posts: 147
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

msidhu Author
wrote...

A year ago
Correct Slight Smile TY
Ifekwunigwe
wrote...

Yesterday
Good timing, thanks!
Ctownsend
wrote...

2 hours ago
Thank you, thank you, thank you!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1057 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 404
  
 468
  
 64
Your Opinion
Who's your favorite biologist?
Votes: 587
Previous poll results: How often do you eat-out per week?