In the short run, the firm makes zero economic profit when the price is ________ minimum average total cost, makes an economic profit when the price is ________ minimum average total cost, and incurs an economic loss when the price is ________ minimum average total cost.

Question

Quizplus · Accepted Answer

In the short run, a firm makes zero economic profit when the price equals the minimum average total cost. It makes an economic profit when the price is higher than the minimum average total cost and incurs an economic loss when the price is lower than the minimum average total cost.

In the Short Run, the Firm Makes Zero Economic Profit