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Short-run profit maximization or loss minimization for a perfectly competitive firm Suppose that the market for polo shirts is a perfectly competitive market. The following
Short-run profit maximization or loss minimization for a perfectly competitive firm Suppose that the market for polo shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in this market. Profit or Loss 0 4 8 12 16 20 24 28 32 36 40 50 45 40 35 30 25 20 15 10 5 0 PRICE AND COST (Dollars per shirt) QUANTITY OF OUTPUT (Shirts) MC ATC AVC In the short run, at a market price of $20 per shirt, this firm will choose to produce shirts per day. On the previous graph, use the blue rectangle (circle symbols) to shade the area representing the firm's profit or loss if the market price is $20 and the firm chooses to produce the quantity you already selected. Note: In the following question, you should enter a positive number in the numeric entry field. The area of this rectangle indicates that the firm's would be $ per day
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