If a firm in a competitive industry is making zero economic profit but still producing, it must be the case that:

Question

Quizplus · Accepted Answer

In a competitive industry, firms are price takers, meaning they have no control over the market price. If a firm is making zero economic profit, it means that its total revenue is equal to its total cost. This implies that marginal revenue (MR) is equal to marginal cost (MC), and both are equal to average total cost (ATC).

If a Firm in a Competitive Industry Is Making Zero