Which of the following is true?

Question

Quizplus · Accepted Answer

Total economic profit is calculated by subtracting total costs from total revenue, which can also be thought of as per unit profit (price minus average total cost) times quantity sold. Choices A, C, and D contain inaccuracies: A) Profit per unit should consider average total cost, not AVC; C) A firm might still operate if price covers AVC but is less than ATC in the short run to cover some fixed costs; D) In perfect competition, firms are price takers and cannot simply raise prices, and if price is less than marginal cost, the firm should reduce output, not increase it.

Which of the Following Is True