Refer to the accompanying figure to answer the following questions.

-A firm would produce in the long run only if the market price is

Question

Refer to the accompanying figure to answer the following questions.
 
-A firm would produce in the long run only if the market price is

Quizplus · Accepted Answer

In the long run, firms will only produce if they can cover all their costs, including their opportunity cost of capital. In this figure, the average total cost curve intersects the marginal cost curve at the minimum point of average total cost, which is $20. Therefore, the firm will produce in the long run only if the market price is at or above $20.

Refer to the Accompanying Figure to Answer the Following Questions