Asked by
Victoria Cardona
on Nov 04, 2024
Verified
If a perfectly competitive firm is currently producing where ________, then the firm will earn zero profits.
A) P > MC and MC = ATC
B) P = MC and MC = ATC
C) P = MC and MC < ATC
D) P < MC and MC > ATC
Zero Profits
A situation where a firm’s total revenues are exactly equal to its total costs, leading to no net profit or loss.
MC = ATC
This is the point where Marginal Cost equals Average Total Cost, typically illustrating the most efficient scale of production in the short run.
- Identify the scenarios in which a perfectly competitive firm reaches a break-even point, achieves profitability, or experiences financial losses.
Verified Answer
AS
Learning Objectives
- Identify the scenarios in which a perfectly competitive firm reaches a break-even point, achieves profitability, or experiences financial losses.