The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. If mushrooms sell for $40 per bushel, and Moe chooses the profit-maximizing quantity, he will:

Question

The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive.  If mushrooms sell for $40 per bushel, and Moe chooses the profit-maximizing quantity, he will:

Quizplus · Accepted Answer

Since $40 is greater than average total cost at the profit-maximizing quantity, Moe will earn a positive profit.

The Accompanying Graph Shows the Cost Curves for Moe's Mushroom