-The figure above shows a perfectly competitive firm.If the market price is $20 per unit,then the firm produces ________ units and makes an economic profit that is ________.
A) more than 30; more than $100
B) 30; more than $100
C) 20; less than $400
D) 0; zero
E) 30; zero

Question

-The figure above shows a perfectly competitive firm.If the market price is $20 per unit,then the firm produces ________ units and makes an economic profit that is ________.
A) more than 30; more than $100 
B) 30; more than $100 
C) 20; less than $400 
D) 0; zero 
E) 30; zero

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce where marginal cost equals market price. If the market price is $20, the firm produces 30 units where price equals marginal cost, and makes zero economic profit as price equals average total cost.

-The Figure Above Shows a Perfectly Competitive Firm