Question 22 2 pts A profit maximizing firm discovers that at its current output

Question

Question 22 2 pts A profit maximizing firm discovers that at its current output level P > ATC ? MC > MR. The firm is producing it making_ output with and Too little; economies of scale; losses Too little; diseconomies of scale ; losses Too much; economies of scale; profits Too much; diseconomies of scale ; profits

Explanation / Answer

Answer is Too Much; Economies of scale and Profits. Explanation: MC> MR. That means the firm is producing beyond equilibrium point of MR=MC. Beyond equilibrium, MC> MR. It means the firm is producing more than equilibrium. ATC> MC means the MC is falling and ATC is falling less than MC, means economies of scale applies. P>ATC means the firm is earning profits.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.