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Frost Frost
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Posts: 433
4 years ago

Figure 12-19




Refer to Figure 12-19. The figure above shows the cost curves of a perfectly competitive firm in the coffee market. Use the graph in Figure 12-19 to answer the following questions. Assume the market price is $3 per pound.

a.

What is the lowest price at which the coffee grower will supply output in the short run?

b.

In the diagram draw the firm's demand curve (label this "MR" for marginal revenue).

c.

What is the firm's profit-maximizing output?

d.

Is the firm earning a profit or a loss? Identify the area in the graph that represents the firm's
profit or loss.

e.

Explain how entry or exit will occur in the market to ensure that firms will break even in the
long run.
Textbook 
InMicro

InMicro


Edition: 1st
Authors:
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Jacobian S.Jacobian S.
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Posts: 388
4 years ago
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Frost Author
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4 years ago
Thank you for answering so quickly
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Thank you so much
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Thank you!!!
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