Figure: Profit Maximization 6 At any price above $60 in this diagram, firms already in this market will be making an economic:

Question

Figure: Profit Maximization 6  At any price above $60 in this diagram, firms already in this market will be making an economic:

Quizplus · Accepted Answer

At any price above $60, firms already in the market are making a profit (P > AC), which means they are covering their average costs and generating a surplus. This will attract other firms to enter the industry in the long run, which will increase competition and put downward pressure on prices. However, in the short run, existing firms will continue to make a profit as they have already established their production processes and can benefit from economies of scale. Therefore, option A is the correct choice.

Figure: Profit Maximization 6 at Any Price Above $60