Draw a graph of a perfectly competitive firm in the short run that is earning losses but will stay in business in the short run. Label everything carefully including the axes, the profit maximizing quantity, price, and economic losses. Explain carefully why the firm will choose to stay in business in the short run. Label the price at which the firm is indifferent between shutting down and staying open, Psd, on the graph.
at this point X firm is indifferent shutting down and staying.
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