"Why would a firm stay in a market with zero profit?"
When working through the Mankiw Chapter 14 solutions, always start by identifying the cost structures provided. Create a table for TR, TC, MR, and MC if they aren't given. Locate the point where MR = MC to find the profit-maximizing quantity. Finally, compare the price to the ATC and AVC to determine if the firm is making a profit, a loss, or if it should stop operations entirely. Mastering these steps ensures a deep understanding of how competitive markets function. mankiw chapter 14 solutions
Long-Run Equilibrium: This occurs when P = ATC. At this point, firms earn zero economic profit. Understanding Zero Economic Profit "Why would a firm stay in a market with zero profit