Figure 13-2
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 13-2.Which of the four prices corresponds to a firm earning positive economic profits in the short run?

Question

Figure 13-2
Suppose a firm operating in a competitive market has the following cost curves: 
-Refer to Figure 13-2.Which of the four prices corresponds to a firm earning positive economic profits in the short run?

Quizplus · Accepted Answer

In the short run, a firm earns positive economic profits if the price is above the average total cost (ATC). P1 is likely above the ATC, allowing the firm to cover all its costs and earn a profit.

Figure 13-2 Suppose a Firm Operating in a Competitive Market Has the Has