Figure 10-4

-Figure 10-4 shows the industry's supply and demand curves in panel (1) and the cost curves of a firm in the industry in panel (2) .At S₂, the firm is

Question

Figure 10-4 -Figure 10-4 shows the industry's supply and demand curves in panel (1) and the cost curves of a firm in the industry in panel (2).At S₂, the firm is

Quizplus · Accepted Answer

At S2, the firm is earning zero economic profits because the price is equal to the average total cost, which is the condition for zero economic profit in a perfectly competitive market.

Figure 10-4 ​

Figure 10-4