Figure 10.12
-Refer to Figure 10.12.The diagram depicts a firm
A)in a constant cost industry.
B)in an increasing cost industry.
C)in long-run equilibrium.
D)that is incurring short-run losses.

Question

Figure 10.12 
-Refer to Figure 10.12.The diagram depicts a firm
A)in a constant cost industry. 
B)in an increasing cost industry. 
C)in long-run equilibrium. 
D)that is incurring short-run losses.

Quizplus · Accepted Answer

In long-run equilibrium, a firm's economic profits are zero, meaning it is covering all its costs, including opportunity costs. This is depicted in the diagram by the firm's price being equal to its average total cost at the profit-maximizing output level.

Figure 10.12 -Refer to Figure 10.12.The Diagram Depicts a Firm