Asked by
Nathalia James
on Nov 05, 2024
Verified
Refer to Figure 15.6. If Trollioʹs T-shirts is producing the quantity where MR = MC and selling each T-shirt at the price where D = ATC, then in the long run this firm should ________ the selling price and ________ quantity.
A) increase; decrease
B) decrease; increase
C) increase; increase
D) not change; not change
MR = MC
The optimal point in economic theory where marginal revenue equals marginal cost, leading to the most efficient level of production.
D = ATC
The condition where a firm's demand curve (D) equals its average total cost (ATC), often used in economic models to analyze firm behavior.
Selling Price
The actual price at which a product or service is sold to the customer.
- Identify the differences between short-run and long-run balances in monopolistically competitive environments.
- Understand the prerequisites for achieving long-run equilibrium in markets characterized by monopolistic competition, particularly how price, output, and average total costs correlate.
Verified Answer
NM
Learning Objectives
- Identify the differences between short-run and long-run balances in monopolistically competitive environments.
- Understand the prerequisites for achieving long-run equilibrium in markets characterized by monopolistic competition, particularly how price, output, and average total costs correlate.