-In the above figure, if the price is $12, a profit- maximising perfectly competitive firm will have an economic profit

Question

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In a perfectly competitive market, firms are price takers, meaning they accept the market price as given. At the point of profit maximization, a firm's economic profit is the difference between its total revenue and total costs. If the price of $12 leads to a situation where total revenue equals total costs, the firm will have an economic profit of zero, indicating it is breaking even with a normal profit. This is a characteristic outcome in long-run equilibrium for perfectly competitive firms, as any economic profit would attract new firms into the industry, increasing supply and driving down prices until only normal profits are possible.

-In the Above Figure, If the Price Is $12, a Profit-