Exhibit 7-3 Cost per unit curves

-As shown in Exhibit 7-3,the price at which the firm earns zero economic profit in the short-run is:

Question

Exhibit 7-3 Cost per unit curves
 
-As shown in Exhibit 7-3,the price at which the firm earns zero economic profit in the short-run is:

Quizplus · Accepted Answer

The point where the firm earns zero economic profit in the short-run is where the price equals the average total cost (ATC) curve. In the graph, this occurs at a price of $2.00 per unit, where the ATC curve intersects the demand curve. Any price below $2.00 per unit would result in a loss for the firm, while any price above $2.00 per unit would result in a positive economic profit. Therefore, the best choice is E, $2.00 per unit.

Exhibit 7-3 Cost Per Unit Curves