The diagrams below show short-run cost curves for four perfectly competitive firms. Assume that each firm faces

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The diagrams below show short-run cost curves for four perfectly competitive firms. Assume that each firm faces a market price of p0.
a. Which firms could earn positive profits at some level of output?

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(i) Firm 1
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(ii) Firm 2
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(iii) Firm 3
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(iv) Firm 4
b. Which firms would be incurring losses at their profit-maximizing level of output, but will continue producing in the short run?
c. Which firms will choose not to produce at price p0?
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Microeconomics

ISBN: 978-0321866349

14th canadian Edition

Authors: Christopher T.S. Ragan, Richard G Lipsey

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