Unformatted text preview: 1 passes from below the MR = AR curve. The point e1 marks its equilibrium position where MR = MC. The firm produces Q1 output. The Total Revenue of the firm is then, Similarly the Total Cost of producing this output is, TC = Output × Average Cost = OQ1 × Q1C1 = OQ1C1R 1 Therefore, Profit = TR - TC = OQ 1e1P -OQ1F1R = R1C1e1 P...
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- Fall '10
- Economics, Firm, Average cost, Cost curve, average cost curve, short run possibilities