When examining the cost curves for a firm, the minimum average variable cost occurs at the output level where Zero point level.
The "zero profit point" is the location where the marginal cost curve crosses the average cost curve, at the minimum of the average cost curve. A completely competitive firm should close its doors if its market price is less than its average variable cost at the profit-maximizing output level.
A totally competitive corporation is unable to control the price it charges because it must accept the price for its output that is established by the supply and demand for the product in the market.
Since the profit calculation already accounts for this, the perfectly competitive firm can provide any quantity of units at the same price.
It suggests that the company's product has a completely elastic demand curve, meaning that customers are eager to purchase any quantity of the company's output at the going rate.
The quantity that the perfectly competitive firm decides to produce will define its total revenue, total costs, and eventual level of profits along with the prices that are currently in effect on the market for inputs and output.
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