StudyLoop

Tag: an illustrated example of zero profit

  • an illustrated example of zero profit, or the normal profit,

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    by

    luna
    in

    point: MARGINAL COST AND THE FIRM’S SUPPLY CURVE For a perfectly competitive firm, the marginal cost curve is identical to the firm’s supply curve starting from the minimum point on the average variable cost curve. To understand why this perhaps surprising insight holds true, first think about what the supply curve means. A firm checks…