Construct a graph with AVC, ATC, and MC curves. On this graph add a marginal revenue curve for a…

Construct a graph with AVC, ATC, and MC curves. On this graph add a marginal revenue curve for a representative firm in a perfectly competitive industry which is maximizing profits at a price of p*1. Add a second marginal revenue curve for a firm which is minimizing losses but continues to produce when the price is p*2. Add a third marginal revenue curve for a firm which is shutting down when the price is p*3. Explain where you decided to place each of the marginal revenue curves and identify the shutdown point on the graph.

 

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