If price is greater than average cost at the profit-maximizing quantity in the short run, a firm will:
A)continue to produce at a loss.
B)produce at a profit.
C)shut down production.
D)reduce its fixed costs.

Question

Quizplus · Accepted Answer

If price is greater than average cost at the profit-maximizing quantity in the short run, a firm will produce at a profit. This is because they are able to cover their variable costs and generate some revenue towards their fixed costs, leading to a positive economic profit.

If Price Is Greater Than Average Cost at the Profit-Maximizing