Figure 14-2
Suppose a firm operating in a competitive market has the following cost curves:

-Refer to Figure 14-2.Which of the four prices corresponds to a firm earning positive economic profits in the short run?

Question

Figure 14-2
Suppose a firm operating in a competitive market has the following cost curves:
 
-Refer to Figure 14-2.Which of the four prices corresponds to a firm earning positive economic profits in the short run?

Quizplus · Accepted Answer

At price P1, the firm is likely covering its average total costs and earning a profit above that, leading to positive economic profits in the short run.

Figure 14-2 Suppose a Firm Operating in a Competitive Market Has the Has