If price equals ATC and equals MC then:

Name: If price equals ATC and equals MC then:
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

When price equals ATC and equals MC, it means that the firm is producing at the efficient scale, which is where economic profits are zero. This is because the firm is earning normal profits, covering all of its costs including opportunity costs. Therefore, there would be no incentive for new firms to enter the market or for existing firms to increase output beyond the current level.

If Price Equals ATC and Equals MC Then