conomist claims that the equilibrium position of each firm in a perfectlycompetitive
industry the equilibrium can be atthepoint where D=P=MR=AR. At that point,you can
notice that the equilibrium market price, average revenue per unit is exactly equal to the
average cost per unit.
This means that AR*Q is exactly equal to AC*Q which means that TR is the same as TC.
Since cost and revenue are the same, this means that there isno profit. so why would any
producer stay in business if there isno profit to be gained from doing so?
NB: Your explanations should be supposed with a graph for more detail
Economist claims that the equilibrium position of each firm in a perfectlycompetitive
industry the equilibrium can be atthepoint where D=P=MR=AR. At that point,you can
notice that the equilibrium market price, average revenue per unit is exactly equal to the
average cost per unit.
This means that AR*Q is exactly equal to AC*Q which means that TR is the same as TC.
Since cost and revenue are the same, this means that there isno profit. so why would any
producer stay in business if there isno profit to be gained from doing so?