So because the factorys price is avc it earns enough

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Unformatted text preview: ion and lower minimum average costs. It also means that it is earning zero economic profits and not incurring any losses. See notes for graphs. 32. B, see graph in lecture slides or notes if I get them to you. 33. D, basically all the conditions needed for ripping people off. Ch. 11. 34. B, see graph in lecture slides or notes if I get them to you. 35. C, see graph in lecture slides or notes if I get them to you. 36. D, when a firm is earning zero economic profits, it doesn’t mean that it’s making no $$. It’s actually making enough accounting profits to offset its variable costs and the opportunity costs associated with operation. 37. A, because according to the information, P = 10 < ATC = 15 and P > AVC = 8. So because the factory’s price is > AVC, it earns enough profits to payoff it variable costs even though it still incurs losses because P < ATC. 38. D, Economic Prof...
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