For a firm in the short run, if the firm produces the quantity at which _____, the firm is earning _____. A)Price Average Cost; economic profits B)Price

Question

For a firm in the short run, if the firm produces the quantity at which _____, the firm is earning _____.
A)Price> Average Cost; economic profits
B)Price < Average Cost; zero profit
C)Price = Average Cost; economic losses
D)Price < Average Cost; economic profits.

Quizplus · Accepted Answer

When a firm's price is greater than its average cost, it is earning economic profits because it is selling its product for more than the average cost of producing it.

For a Firm in the Short Run, If the Firm