Suppose a perfectly competitive firm faces the following situation: P = $9; output = 4,000; ATC = $9; AVC = $6; and MC = $9. Which statement accurately describes the firm's and the market's situations?
A) The firm incurs a normal profit; the market is in a long-run equilibrium.
B) The firm earns economic profit; the market is in a long-run equilibrium.
C) The firm incurs losses; the market is in a short-run equilibrium.
D) The firm earns economic profit; the market is in a short run equilibrium.
Correct Answer:
Verified
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