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 zero 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 zero economic profits in the short run?

Quizplus · Accepted Answer

The point where the firm earns zero economic profits is where the price (P) is equal to the average total cost (ATC). In this case, that occurs at point B, where P2 intersects with the ATC curve. Therefore, the answer is B.

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