Firms will always make a positive economic profit if the price they charge is

Question

Quizplus · Accepted Answer

Firms will make a positive economic profit when the price they charge is greater than their minimum average total cost (ATC). This is because the total revenue generated by selling the product or service at that price is greater than the total cost incurred in production, including both variable and fixed costs. If the price were only greater than the minimum average variable cost (AVC) (option C), the firm would still make a profit in the short run but not in the long run since it would not cover all its costs. Option A and B are incorrect since the price must cover both the average variable and fixed costs in order to make a profit, and option E is incorrect since a firm can still make a profit if the price is above their minimum ATC, but not necessarily if the price is exactly equal to the minimum ATC.

Firms Will Always Make a Positive Economic Profit If the Price