Assume that apples are produced in a perfectly competitive market. Grande’s Orchard is a typical firm that grows and sells apples. Currently, Grande earns zero economic profit, and the market price of apples is $10 per bushel.
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The demand curve will be fixed at the market price and this implies that the demand for the firm will be horizontal at $10.
A perfectly completive market simply means the market where all the firms that are in the market sell identical products. Also, the firms are price takers as they cannot influence the market price.
From the complete question, the demand curve will be fixed at the market price and this means that the demand for the firm will be horizontal or flat at $10. Also, Grande earns zero economic profit and this implies that the average total cost will have its minimum value that's equal to $10.
In conclusion, the marginal cost curve will slope up and then meet the demand curve at P = $10.
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