Micro Unit 3.7 CW: Perfect Competition (MS)

This firm will maximize profits by producing output quantity D.

At the profit-maximizing output total revenue 0GLD.

At output C, production will result in an economic profit.

At output C, total variable cost is FGKJ.

At output C, average fixed cost is GF.

At any price below RA the firm will choose to shut down in the short run.

If demand fell to the level of FNJ, there would be no output at which the firm could realize positive economic profit.

If the firm produced D units of output at price G, it would break even.

While producing, total costs are minimized at output level B.