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4 Suppose ATC is average total cost and p denotes per-unit price. If p > ATC where MR = MC a. firms earn negative profits
4
Suppose ATC is average total cost and p denotes per-unit price. If p > ATC where MR = MC
a.
firms earn negative profits and existing firms will leave.
b.
firms earn zero profits and new firms will not enter and no existing firms will leave.
c.
firms earn positive profits and new firms will enter.
d.
none of the above.
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