Which of the following conditions will result in the firm making an economic profit? A) P ATC B) P P AVC

Name: Which of the following conditions will result in the firm making an economic profit? A) P > ATC B) P P > AVC
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Question

Which of the following conditions will result in the firm making an economic profit?
A) P > ATC
B) P < ATC
C) P = ATC
D) P = AVC
E) ATC > P > AVC

Quizplus · Accepted Answer

Economic profit occurs when total revenue (P) exceeds total costs (ATC), which includes both fixed costs (F) and variable costs (S). Therefore, P > ATC, which is satisfied in option A.

Which of the Following Conditions Will Result in the Firm