My study group has been at odds with each other over this question. We have the following to select from:
a. P>AC
b. AVC
d. P=AVC
How can this be determined?
2006-12-01 23:35:11 · 3 answers · asked by jsrscuba 1 in Social Science ➔ Economics
In the long run Average revenue = Average total costs. That is the Margianl Revenue=Average Revenue curve slants downwards to pass through the Average total cost line. In the short run it was parallel ot the Qunatity axis x-axis. So this satisfies your premise.
2006-12-02 08:29:24 · answer #1 · answered by Mathew C 5 · 0⤊ 0⤋
if the firm is perfectly competetive and is receiving normal profits..the short run will be exactly as a long run...i.e. P=AC. if P>AC firm would be making supernormal profits.
ps. not the clearest of questions and it can mean something different , were there answer can be A.
2006-12-02 04:56:30 · answer #2 · answered by Yura 2 · 0⤊ 0⤋
a. P>AC
2006-12-01 23:38:51 · answer #3 · answered by Dr Dee 7 · 0⤊ 1⤋