In short-run equilibrium, a competitive price-taker firm
A) may earn a profit or a loss.
B) always earns a profit.
C) never earns a profit.
D) earns a profit only if the firm has no fixed cost.

Question

Quizplus · Accepted Answer

In the short-run, a competitive price-taker firm can earn a profit, break even, or incur a loss depending on the market price relative to its average total cost.

In Short-Run Equilibrium, a Competitive Price-Taker Firm