If a firm sells only pharmaceutical grade aspirin (and no other products)and is currently pricing the aspirin below average variable costs,the firm is currently making ________ economic profits.
A) negative
B) 0 (zero)
C) positive
D) abnormally high
E) accounting

Question

Quizplus · Accepted Answer

If the firm is selling below average variable costs, it means that it is not covering its variable costs, such as labor and raw materials. This implies that the firm is incurring losses and hence making negative economic profits.

If a Firm Sells Only Pharmaceutical Grade Aspirin (And No