Do you agree or disagree with this statement? Firms minimize costs; thus, a firm earning short-run economic profits will choose to produce at the minimum point on its average total cost curve.
You are given the following cost data:
Total fixed costs are $60.
How many units of output will this firm produce at a price of $22 and at a price of $42? What is the total revenue and total cost at each price? What is the profit at each price? Briefly explain using the concept of marginal cost.