00:01
Hey everyone.
00:02
Today we're solving problem number eight from chapter 10 of the textbook, which asks us, how can you tell when a monopolistic, essentially when a monopolistic competitive firm is making a profit or making a loss? so i've taken out this image from your reading in chapter 10 of the textbook.
00:28
And in figure 10 .4 of chapter 10, it basically state that figure a right here, you are making a profit.
00:41
And the reason why, if you look at it, is that price is above average cost.
00:46
So basically this means that if the price is changing, it'll always be above the average cost of production.
00:55
So when p is greater than ac or when price is greater than average cost, remember that's average cost of production.
01:06
So you can write average cop if you wanted.
01:09
That's when you're going to incurring a profit...