Cost And Revenue

Full Answer Section

• Why zero economic profit in long-run? I'll delve into the concepts of economic profit vs. accounting profit, free entry and exit, and the role of opportunity costs in perfectly and monopolistically competitive markets to explain why firms persist even with zero economic profits.

To ensure the most effective assistance, please:

• Share the specific formulas and data from the Excel template.
• Describe any challenges or questions you have regarding the calculations or interpretations.
• Provide any relevant details from your readings or course materials.

I'm committed to providing comprehensive explanations and insights to help you successfully complete this assignment. Feel free to ask any questions or provide additional information you need.

Sample Solution

1. Completing the Excel Template:

• I'll provide the formulas for MC, MR, AFC, AVC, and ATC, ensuring accuracy even with changing numbers.
• I'll guide you on appropriate graphing techniques to visualize the cost curves and MR curve.
• I'll assist in identifying the profit-maximizing price and output levels.
• I'll help you calculate the resulting profit or loss.

2. Addressing the Paper Prompts:

• Should the firm remain open at $10? I'll provide a detailed analysis based on the shutdown rule, comparing AVC and price to determine the optimal decision.