Question

# 12. A firm is producing at an output level where AR = MC > AC >...

12. A firm is producing at an output level where

AR = MC > AC > MR = 0

a. Is this firm maximizing profits?

b. Is this firm maximizing revenue(sales)?

c. Is it making more than normal profits?

d. Could this firm decrease average costs by increasing production?

e. Could this firm increase total revenue by increasing production?

13. Do the same for: AC = AR > MR > MC > 0

14. Also for the following: AR=MR=MC=AC   (what type of situation is this most likely?)

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