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Abnormal Profit and Normal Demand Cost Quantity MC AC MR D=AR

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Abnormal Profit and Normal Demand. MC. AC. Cost. D=AR. Quantity. MR. LRAC Curve with SRAC Curves. SRAC1. SRAC5. SRAC2. SRAC4. LRAC. SRAC3. Cost. Quantity. Shut Down Price and Break-Even Price. MC. Cost. ATC. b reakeven price. AVC. P1=ATC. s hut down price. P=AVC. Quantity. - PowerPoint PPT Presentation

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Page 1: Abnormal Profit and Normal Demand

Abnormal Profit and Normal Demand

Cost

Quantity

MC

AC

MR

D=AR

Page 2: Abnormal Profit and Normal Demand

LRAC Curve with SRAC Curves

Cost

Quantity

LRAC

SRAC1

SRAC2SRAC3

SRAC4

SRAC5

Page 3: Abnormal Profit and Normal Demand

Shut Down Price and Break-Even Price

Cost

Quantity

MC

ATC

AVCP1=ATC

P=AVC

breakeven price

shut down price

Page 4: Abnormal Profit and Normal Demand

Cost Curves DiagramMC ATC

AVC

AFC

Cost

Quantity

Page 5: Abnormal Profit and Normal Demand

Economics and Diseconomies of Scale

Cost

Quantity

Economics of Scale Diseconomies of Scale

Constant Return to Scale


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