In order for a firm to earn economic profits, price must exceed average total cost.

Name: In order for a firm to earn economic profits, price must exceed average total cost.
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Economic profit occurs when a firm's total revenues exceed its total costs, including both explicit and implicit costs. Since average total cost includes all costs a firm faces (both explicit and implicit), for a firm to earn economic profits, the price at which it sells its product must be higher than its average total cost.

In Order for a Firm to Earn Economic Profits, Price