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Unformatted text preview: long run, competitive firms will exit the market if the rpice is below the average total cost. Profit In the short run there are three types of firm 1) Economic Profit Earning Firm 2) Normal profit earning earning Firm Know the four graphs that appeared in ATC MR 300 milliong gallons of milk Milk equilibrium, where demand equals supply All the firms are price demand and average revenue will remain and one and the same He knows how to use his resources productively and at full capacity As he has control over the cost curve. His cost curves will be below the revenue curve Where marginal revenue equals marginal cost Profit = (Price ATC) x Qs...
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- Spring '11