Answer to Question #225548 in Economics of Enterprise for Cebo

Question #225548

Explain the three possible profit maximizing positions of perfectly competitive firms in the short-run.


May i have a detailed explanation worth (15 marks)


1
Expert's answer
2021-08-12T10:27:26-0400


Based on the short run, companies usually maximize their profits through identifying outputs that their marginal revenue is equal to the marginal cost.


During a short run, a company may maximize the profit if the average total cost is less compared to the price which is a symbol of a company making profit.

In the short run, a company similarly maximizes the profit if the marginal cost is the same as the price.


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