Maximizing the profit margin according to the marginal


Maximizing the Profit? Margin? According to the marginal? principle, the firm should choose the quantity of output at which price equals marginal cost. A tempting alternative is to maximize the? firm's profit? margin, defined as the difference between price and? short-run average total cost. Using this? approach, which of the following would best describe the? firm's short-run supply? curve? Assume the firm will shut down rather than operate at a loss. A. It is equal to the average cost? curve, but shifted up. B. It is equal to the average cost curve. C. A vertical line at the quantity that minimizes average cost. D. A vertical line at the quantity that minimizes average cost for prices above minimum average cost.

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Business Economics: Maximizing the profit margin according to the marginal
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