00:01
Hello students, we are given a question here that suppose a perfectly competitive firm faces average total cost six dollar average variable cost four dollar margin cost three point five dollar and margin revenue 3 .5 dollar okay so basically we are asked the firm should so we are given here some options as well so since we are supposed to know that the price have to be equal to mr okay as since we are given it is a perfectly competitive market so basically mr is given as equals to $3 .5.
00:34
So market price will also be $3 .5.
00:38
Okay, we can write here.
00:39
So market price, market price p will be $3 .5.
00:50
Okay, students.
00:51
Now, here we are supposed to know that since we can say that p is a, as we are given here, that the average variable cost is $4.
01:01
Okay, students, we can write.
01:03
Here that the sensor average variable cost it means avc is nothing but equal to four dollar okay students and we can say that third three point five dollar is a less than obviously four dollar it means p is less than average variable cost p is less than a bc students so we can say that here hence here market price can't cover the variable cost in order to maximize profit...