McKinsey's Industry Cost Curve Graph Model Template

SOLVED: Q.1 Consider the following graph which shows the cost curves of a firm. MC YOUNGS ATC AVC —- Qg Q – Q1 Q2 (a) Is the firm operating in short run or long run? Explain. (b) Is the gap between ATC and AVC increasing or decreasing over quantity? Explain. (c) Suppose wages increase, does AFC increase or not? Explain (d) Suppose rental payment increases, does MC increase or not? Explain (e) On a separate graph, draw the TC, TVC and TFC. Indicate the quantity that the TC starts to get steeper a

Draw marginal cost, marginal revenue, and average total cost curves for a typical perfectly competitive firm in long-run equilibrium and indicate the profitmaximizing level of output and total profit for that firm. | Numerade