Joe\'s Garage operates in a perfectly competitve market. At the point where marg

Question

Joe's Garage operates in a perfectly competitve market. At the point where marginal cost equals marginal revenue, ATC=$15,and the price per unit is $10. in this situation, a.Joe's Garage is earning a positive economic profit b.jOE'S Garage should shut down immediately c.Joe's Garage is losing money in the short run, but shouldcontinue to operate. d.the market price will rise in the short run to increaseprofits. Joe's Garage operates in a perfectly competitve market. At the point where marginal cost equals marginal revenue, ATC=$15,and the price per unit is $10. in this situation, a.Joe's Garage is earning a positive economic profit b.jOE'S Garage should shut down immediately c.Joe's Garage is losing money in the short run, but shouldcontinue to operate. d.the market price will rise in the short run to increaseprofits.

Explanation / Answer

Joe's Garage operates in a perfectly competitve market. At the point where marginal cost equals marginal revenue, ATC=$15,and the price per unit is $10. in this situation, a.Joe's Garage is earning a positiveeconomic profit- which is maximized profit which woudl mean noother opportunity cost would be better b.jOE'S Garage should shut down immediately c.Joe's Garage is losing money in the short run, but shouldcontinue to operate. d.the market price will rise in the short run to increaseprofits.

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