FIGURE 11-2
-Refer to Figure 11-2.A perfectly competitive firm with zero economic profits is depicted in diagram

Question

Quizplus · Accepted Answer

Diagram C shows the firm producing at the point where price equals marginal cost, which is the efficient output level in a perfectly competitive market. At this output level, the firm earns zero economic profits. Diagrams A, B, D, and E all depict a situation where the firm is earning economic profits, so they are not the best choice.

FIGURE 11-2 -Refer to Figure 11-2.A Perfectly Competitive Firm with Zero Economic