A perfectly competitive firm ________ at the level of output where P = ATC.
A) earns an economic profit
B) suffers an economic loss
C) breaks even
D) shuts down

Question

Quizplus · Accepted Answer

In a perfectly competitive market, when a firm's price (P) equals its average total cost (ATC), the firm is breaking even, meaning it is covering all its costs but not earning an economic profit.

A Perfectly Competitive Firm ________ at the Level of Output