If a perfect competitive firm is currently equating MR and MC and product price = $200,...
If a perfect competitive firm is currently equating MR and MC and product price = $200, AVC = $180, and ATC = $200, then in the long run this firm:
Group of answer choices
A. will continue to operate at a loss.
B. will earn a zero economic profit.
C. will go out of business.
D. should increase output.
E. should decrease price.
Homework Answers
Answer
Option B
B. will earn a zero economic profit.
the firm is producing at MR=MC where P=ATC means the firm is making zero economic profit so there will be no entry and exit in the market and the firm will continue to produce at the profit level.
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3. If the market clearing price drops to $10.00 per unit,
should they continue to produce in the short run if they wish to
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