Profit-maximizing firms enter a competitive market when, for existing firms in that market,
A) total revenue exceeds fixed costs.
B) total revenue exceeds total variable costs.
C) average total cost exceeds average revenue.
D) price exceeds average total cost.

Question

Quizplus · Accepted Answer

Firms enter a competitive market when the price exceeds average total cost, as this indicates the potential for profit.

Profit-Maximizing Firms Enter a Competitive Market When, for Existing Firms