In a competitive market,if the market price is equal to the minimum point of the firm's ATC curve,the firm may seek to earn economic profits by
A)Producing at the rate of output where price equals demand.
B)Decreasing production costs through technological improvements.
C)Decreasing price.
D)Increasing price.

Question

Quizplus · Accepted Answer

When the market price is equal to the minimum point of the firm's average total cost (ATC) curve, the firm is covering all its costs, including the normal profit (zero economic profit). To earn economic profits, the firm needs to lower its costs without affecting the selling price. Technological improvements can lead to more efficient production processes, thereby decreasing production costs and allowing the firm to earn economic profits at the same market price.

In a Competitive Market,if the Market Price Is Equal to the Minimum