Figure 9-12
-Figure 9-12 illustrates a
A) competitive price-taker firm that is earning economic profit.
B) competitive price-taker firm that is only able to break even when it is maximizing economic profit.
C) firm that should shut down immediately.
D) competitive price-taker firm that is making economic losses.

Question

Figure 9-12 
-Figure 9-12 illustrates a
A) competitive price-taker firm that is earning economic profit. 
B) competitive price-taker firm that is only able to break even when it is maximizing economic profit. 
C) firm that should shut down immediately. 
D) competitive price-taker firm that is making economic losses.

Quizplus · Accepted Answer

A competitive price-taker firm that is breaking even is covering all its costs, including opportunity costs, when maximizing economic profit. This means total revenue equals total cost, resulting in zero economic profit.

Figure 9-12 -Figure 9-12 Illustrates a