If a firm can produce a product at a lower average cost than its competitors, it stands a better chance of earning economic profit.

Question

Quizplus · Accepted Answer

This is because if the firm can produce at a lower cost, it can either sell its product at a lower price or earn a higher margin on its products than competitors without sacrificing quality, which can result in higher sales volume and higher profit margins.

If a Firm Can Produce a Product at a Lower