Show and explain the situation in which a profit maximizing, perfectly competitive firm is earning a positive economic profit.

Economic profit maximization

Graph the profit maximization for a perfectly competitive firm. Show equilibrium profit and quantity.

Show and explain the situation in which a profit maximizing, perfectly competitive firm is earning a positive economic profit. Be sure to label the profit maximizing level of output and shade in the area that represents profit.

Show and explain the situation in which a profit maximizing, perfectly competitive firm is earning a negative profit and chooses to continue to produce in the short-run.

Show and explain how B would change if the firm chose to shut down.

 

Show and explain the situation in which a profit maximizing, perfectly competitive firm is earning a positive economic profit.
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