Exhibit 7-17 Marginal revenue and cost per unit curves As shown in Exhibit 7-17, the price at which the firm earns zero economic profit in the short-run is:

Question

Exhibit 7-17  Marginal revenue and cost per unit curves  As shown in Exhibit 7-17, the price at which the firm earns zero economic profit in the short-run is:

Quizplus · Accepted Answer

The intersection point of the marginal cost (MC) and marginal revenue (MR) curves gives us the profit-maximizing output level. At the profit-maximizing output level, the price is equal to the marginal cost, which is $20 per unit in this case. This means that at a price of $20 per unit, the firm is earning zero economic profit in the short-run. Therefore, the answer is E.

Exhibit 7-17 Marginal Revenue and Cost Per Unit Curves as Shown