Maximum economic profit operates in new competitive firm

When this competitive firm operates at point d in demonstrated graph, in that case this: (w) could increase profits by expanding output to q₅. (x) maximizes economic profit [ as area P₂P₁de], but these profits will evaporate in the long run as new firms enter the industry. (y) minimizes economic losses, that equal area P₃P₂ef. (z) experiences total fixed costs equal to area OP₁dq₄.

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