The "Bubbles, Bubbles"soap bubble firm's price and cost data are: price = $10;MR = $10; MC = $10; ATC = $10. This firm is
A) making an economic profit of $10
B) in monopolistic competition and in short-run equilibrium
C) about to shut down because economic profit is zero
D) a monopolist with a relatively inelastic demand
E) in a perfectly competitive market and in long-run equilibrium

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are in long-run equilibrium when price equals marginal cost (P = MC) and average total cost (ATC), which means they are making zero economic profit. This condition is met with the given data.

The "Bubbles, Bubbles"soap Bubble Firm's Price and Cost Data Are