The profit maximizing level of output

The profit maximizing level of output - of all the...

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The profit maximizing level of output, where marginal cost equals marginal revenue, results in an  equilibrium quantity of  Q  units of output. Because the firm's average total costs per unit equal the  firm's marginal revenue per unit, the firm is earning zero economic profits. Furthermore, the firm is  shown to be producing at the minimum point of its long-run average total cost curve, at the minimum  efficient scale level of output.  Long-run market supply curve.  The short-run market supply curve is just the horizontal summation 
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Unformatted text preview: of all the individual firm's supply curves. The long-run market supply curve is found by examining the responsiveness of short-run market supply to a change in market demand. Consider the market demand and supply curves depicted in Figures 2 (a) and 2 (b). Here, the market demand curves are labeled D 1 , and D 2 , while the short-run market supply curves are labeled S 1 and S 2 . Figure 2 Long-run market supply curves...
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This note was uploaded on 11/19/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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