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P R C

P R C. MC. ATC. AVC. Q. P R C. MC. ATC. P 1. AVC. P 2. P 3. P 1 : Economic profit P 2 = min ATC : Break even price, firms makes normal profit ATC>P 3 >AVC : Loss, but continues to produce P 4 = min AVC : Shut down price. Indifferent between producing or shutting down.

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P R C

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  1. P R C MC ATC AVC Q

  2. P R C MC ATC P1 AVC P2 P3 P1: Economic profit P2= min ATC : Break even price, firms makes normal profit ATC>P3>AVC : Loss, but continues to produce P4 = min AVC: Shut down price. Indifferent between producing or shutting down. P5 < min AVC: Loss, firms shuts down P4 P5 Q

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