In short-run equilibrium, the perfectly competitive firm may be making __________ economic profits.

Question

Quizplus · Accepted Answer

In the short-run equilibrium, a perfectly competitive firm can be making positive economic profits if the market price is above the average total cost, zero economic profits if the market price equals the average total cost, or negative economic profits (losses) if the market price is below the average total cost.

In Short-Run Equilibrium, the Perfectly Competitive Firm May Be Making