Consider a McDonald's restaurant that sells hamburgers in a small town alongside a few other fast-food restaurants.
(A)Draw the marginal cost,average total cost,demand,and marginal revenue curves for the McDonald's restaurant,assuming the profit-maximizing price is greater than the average total cost.Show the restaurant's profit.
(B)Explain what might happen in this situation to bring about a long-run equilibrium.Would more restaurants open,or would some leave?
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(B)In the long run,more restaurants...View Answer
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