Question #9842

what are three important cost curves and two important revenue curve and how do they play their role in determining
equilibrium price
equilibrium quantity
equilibrium point
abnormal profit
in monopoly

Expert's answer

the three important cost curves are Marginal Costs (MC), Average Total Costs (ATC) and Average Variable

Costs (AVC) and two important revenue curves are Marginal Revenue (MR) and

Demand (D).

Their role in determining

1) equilibrium price: the intersection of MR and MC

2) equilibrium quantity: the intersection of MR and MC

3) equilibrium point: the intersection of MR and MC, MR = D, MC = S

4) abnormal profit in monopoly: the point on the demand curve above the intersection of MR and MC.

Costs (AVC) and two important revenue curves are Marginal Revenue (MR) and

Demand (D).

Their role in determining

1) equilibrium price: the intersection of MR and MC

2) equilibrium quantity: the intersection of MR and MC

3) equilibrium point: the intersection of MR and MC, MR = D, MC = S

4) abnormal profit in monopoly: the point on the demand curve above the intersection of MR and MC.

## Comments

## Leave a comment