In pure competition, a firm earns an economic loss when:

Name: In pure competition, a firm earns an economic loss when:
Brand: Quizplus
Rating: 4.9 (52 reviews)

Question

Quizplus · Accepted Answer

In pure competition, a firm earns an economic loss when its average total costs exceed the price at which it can sell its product, which happens when the average total costs curve lies above the firm's demand curve. This means the price (determined by the market) is not high enough to cover the average total costs of production, leading to an economic loss.

In Pure Competition, a Firm Earns an Economic Loss When