Assume that a firm faces a downward-sloping demand curve. Draw a diagram showing the firm’s AR, MR, AC and MC curves. (Draw them in such a way that th
Assume that a firm faces a downward-sloping demand curve. Draw a diagram showing the firm’s AR, MR, AC and MC curves. (Draw them in such a way that the firm can make supernormal profits.) Mark the following on the diagram:
\r\n(a) The firm’s profit-maximising output and price.
\r\n(b) Its sales-revenue-maximising output and price.
\r\n(c) Its sales-maximising output and price (subject to earning at least normal profit).