FIGURE 9-1
-Refer to Figure 9-1. The diagram shows cost curves for a perfectly competitive firm. The firm would incur economic profit at all market prices above

Question

Quizplus · Accepted Answer

Economic profit occurs when the market price is above the average total cost (ATC). In the diagram, P3 is the price level where the firm covers its ATC, so any price above P3 would result in economic profit.

FIGURE 9-1 -Refer to Figure 9-1. the Diagram Shows Cost Curves for Curves