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Unformatted text preview: output Q. Since for smaller output levels Average Cost is still falling and for larger output levels Average Cost is rising, at initial point S Average Cost C 1 = Price P. At price P a firms supply is Q. If a firm is required to make additional supply such as Q 1 it will expect to cover its additional or Marginal Cost as S 1 = C 1 . Supply will increase only when C 1 = price P 1 in the market i.aspsing....
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- Fall '10
- Market Equilibrium