Figure 6.2:
-Refer to Figure 6.2 for a perfectly competitive firm.If price is $4,the firm is:

Question

Figure 6.2: 
-Refer to Figure 6.2 for a perfectly competitive firm.If price is $4,the firm is:

Quizplus · Accepted Answer

At a price of $4, the firm's marginal cost (MC) curve intersects with its average total cost (ATC) curve at a point where both curves are above the price level. This means that the firm is producing output, but is incurring higher costs than the price it is receiving for the output. Therefore, it is experiencing an economic loss. In the long run, if the market conditions do not improve, the firm may exit the industry. However, in the short run, it is not maximizing efficiency or earning an economic profit.

Figure 6.2: -Refer to Figure 6.2 for a Perfectly Competitive Firm.If Price