Basically because there's no competition there's 0 incentive to cut costs. This is the correct diagram.
I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding
I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding
As long as your diagram shows actual cost being higher than minimum cost, its correct. There are like 4 correct diagrams for it
Basically because there's no competition there's 0 incentive to cut costs. This is the correct diagram.
I wouldn't say there is zero incentive to cut costs. As cutting costs still leads to increased profit. Rather I would say that the survival of the firm does not depend on cutting costs and therefore it is not a huge priority.