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Question: atampt assignment 4fall 2 ay 201 819docx question 3...

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AT&T × Assignment 4-Fall 2 AY 201 8.19.docx Question 3: Refer to the figure below 4:17 PM c 42%. Cost () ATCA per day Answer the following questions What is Average Total Cost (ATC) and how it is calculated? What is the usual slope of the Average Total Cost and why? Why does it slope downward and upward? Explain the three scales in a Long-Run ATC. In the above figure explain where those scales are? Question 4: Answer the following questions for perfect competition situation. The relationship between Price, Marginal Revenue and Average Revenue in Perfect Competition. Provide reasoning while explaining. At what level a firm in Perfect Competition should produce to maximize their profit? If they are currently producing at a level where their Marginal Revenue is greater or lesser than the Marginal Cost, then what they should do? How does a firm in perfect competition makes a shut-down (short-run) decision and Exit (long-run) decision? Open With Print
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