Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / A company sells t-shirts in the downtown area or a city and faces perfectly competitive ma...

A company sells t-shirts in the downtown area or a city and faces perfectly competitive market conditions. The graph on the next page illustrates the short-run cost curves for this company. Assume

A company sells t-shirts in the downtown area or a city and faces perfectly competitive market conditions. The graph on the next page illustrates the short-run cost curves for this company. Assume that the company's owner wants to maximize their profits. Will this firm operate if the price of a t-shirt is $4? Will profits be positive, negative, or zero? Will this firm operate if the price of a t-shirt is $10? Will profits be positive, negative, or zero? Suppose the price of a t-shirt is $16. Will this firm operate? If so, find the profit-maximizing level of output On the graph on the next page, shade the region that represents the firm's profits. Are these profits positive or negative? If the price of a t-shirt is $16, as in part c, will the market for t-shirts experience entry or exit in the long run? Once this process of entry or exit is complete, what will the long-run equilibrium price per t-shirt be?

A company sells t-shirts in the downtown area or a

Jul 02 2021 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions