Which of the following conditions will result in the firm making zero economic profits? A) P ATC B) P P AVC

Question

Which of the following conditions will result in the firm making zero economic profits?
A) P > ATC
B) P < ATC
C) P = ATC
D) P = AVC
E) ATC > P > AVC

Quizplus · Accepted Answer

When price (P) is equal to average total cost (ATC), the firm is earning only normal profits, which means it is not making any economic profits. Therefore, choice C is the correct answer. Choices A, B, D, and E all imply that the firm is either earning positive or negative economic profits.

Which of the Following Conditions Will Result in the Firm