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(Solved): Optimal level of output. The graph shows the long-run AC cost curve of a comp ...
Optimal level of output. The graph shows the long-run AC cost curve of a company operating in a perfectly competitive market. Assume that the market price is \( P_{1} \) and that the current output is \( Q_{1} \). What is the optimal level of output for this company? What should the company do to achieve the optimal level of output? Show how much is the marginal profit and average profit for \( Q_{1} \). Which one is positive?
Expert Answer
Costs refer to the money incurred in the process of production of a good o