If a perfectly competitive firm in the short run is producing where P = ATC = MC, this firm is
A) on the downward- sloping portion of its demand curve.
B) at its profit- maximizing output level.
C) earning economic profits.
D) incurring losses.
E) obliged to shut down.

Question

Quizplus · Accepted Answer

When a perfectly competitive firm is producing where P = ATC = MC, it is at its profit-maximizing output level in the short run. This means it is earning zero economic profits, but not necessarily incurring losses or obliged to shut down.

If a Perfectly Competitive Firm in the Short Run Is