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#cfa #cfa-level-1 #economics #has-images #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit
in the long run, at any price below the breakeven point, the firm will exit the market, i.e., the firm will no longer participate in the market.
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y absorb the unavoidable fixed costs. This problem occurs at output Q 1 , which corresponds to point C where price is less than average variable cost. However, in the long run, to remain in business, the price must cover all costs. Therefore, <span>in the long run, at any price below the breakeven point, the firm will exit the market, i.e., the firm will no longer participate in the market. Point D, which corresponds to output Q 3 , is a position where economic profit occurs because price is greater than ATC. In the case of perfect competition, th
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y absorb the unavoidable fixed costs. This problem occurs at output Q 1 , which corresponds to point C where price is less than average variable cost. However, in the long run, to remain in business, the price must cover all costs. Therefore, <span>in the long run, at any price below the breakeven point, the firm will exit the market, i.e., the firm will no longer participate in the market. Point D, which corresponds to output Q 3 , is a position where economic profit occurs because price is greater than ATC. In the case of perfect competition, th
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