In a perfectly competitive market,when price is equal to the
A)Minimum short-run average total cost,it has reached the shutdown point.
B)Minimum average variable cost,economic profit is zero.
C)Marginal cost,accounting profit is maximized.
D)Minimum average total cost,economic profit is zero.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce at the point where price is equal to the minimum average total cost. At this point, economic profit is zero because the firm is only covering its opportunity cost of production. If price falls below this point, the firm would be better off shutting down in the short run. Therefore, choice D is the correct answer.

In a Perfectly Competitive Market,when Price Is Equal to the